cancel fha private-mortagage insurance

hi nicolas

welcome to mortgagefit forum.

you cannot cancel the mortgage insurance on your fha loan. private mortgage insurance on fha loan is better known as fha insurance. it is quite different from the private mortgage insurance on conventional mortgages.

private mortgage insurance on any other mortgage can be cancelled under certain circumstances but fha mortgage insurance lasts for the life of the loan. so in case you want to cancel it, you should refinance the fha loan with a conventional loan, such that you have sufficient equity to avoid paying for any private mortgage insurance.

hope this information will help to clear your doubt.

please let us know if you have any other query.

regards,
caron.

Not sure where you get your information from Caron, but you might want to double check. With an FHA loan, you can cancel the PMI after two conditions are met:

1) You have to have held the loan for at least 5 yrs.
2) You have paid down at least 22% of the amount borrowed.

Kevin

Hi KBL

I would like to add that one can stop paying the private mortgage insurance on an FHA loan only when he has been paying for the premiums for at least 5 years. On a 30-year loan, an FHA customer can stop paying for the insurance after he has paid down 78 percent of the sale price or appraised value of the property.

But on loans having terms of 15 years or less and loan to value ratios of 90% or more, a borrower can cancel the insurance after a certain period. There are also some short term FHA loans having LTV less than 90%, on which the annual insurance premiums are not charged at all.

Andrew

On a 30 FHA mortgage, it cancels after 5 yrs and the LOAN TO VALUE reaches 78%, or the amount has been paid down 22%, not 78%.

A 15 yr FHA will cancel at 78% LTV regardless of how long the premiums have been paid. If the LTV is 89.99% or less, there is no PMI on a 15 yr FHA.

Kevin

I have really gained from the discussion here. I would like to know what are the expenses that I have to face while taking a FHA mortgage?

Hi Rick,

These are some of the expenses that a buyer has to meet while purchasing a house with a FHA mortgage:

• Down payment (usually not more than 3%)
  
• appraisal fee
  
• escrow
  
• mortgage origination fee (usually 1% of base mortgage amount)
  
• recording fees
  
• credit report charges
  
• title insurance policy fees
  
• MMI impounds
  
• hazard insurance and reserves
  
• MIP (which is an insurance and can be financed)
  
• property taxes
  

Hope this information will be useful to you.

Regards,
Blue

While FHA usually requires a 3% downpayment, there are gift grants out there to cover that amount. FHA requires that you invest 3/4 of 1% in FHA allowable closing costs, but with the allowed 6% seller concession, most 30 yr FHA loans I set up have the seller coming to the table w/ under $100.

I am in the process of refinancing and a loan with a pmi is giving me a lower interest rate than one with lender paid pmi, any ideas?

Hi Chris,

Welcome to MortgageFit Forums.

I think it is better to go for the loan with a pmi to be paid by the borrower (BPMI) than a lender paid pmi(LPMI).

The LPMI has a higher interest rate than the BPMI. Another reason is that BPMI can be terminated at your request whereas LPMI is terminated only when the mortgage is refinanced, paid off, or otherwise terminated.

Hope this information may satisfy your query. Feel free to post if you have any more doubts.

God bless you.

For MortgageFit,
Samantha

does laws regarding termination and cancellation of pmi apply to lender paid pmi

LPMI is not covered by cancellation or termination rules but a lender is required to inform the borrower about cancellation rights he may have for loans with LPMI. Lender should also provide written notice to the borrower before or on the day of closing which would state the difference between a borrower and lender paid pmi.

Lender is also required to send written notice within 30 days from the date pmi would have terminated as per laws if it was a borrower paid private mortgage insurance.

The notice should include a statement about borrower reviewing his financing choices which can be used to eliminate the lpmi.

Welcome Schwartz.

The PMI Act regarding cancellation of the private mortgage insurance was introduced in the year 1999. The Act helps borrowers with loans originated after 1999 and meeting the specific requirements to cancel their PMI premiums. This law basically applies to borrower paid insurance and not the lender-paid PMI.

If the lender is paying for the insurance, he needs to disclose all related information to the borrower.

Thanks.

Duplicate content, hence it has been deleted.

[Sam]

LIGROY, unless you are Martin Lukac, you need to stop posting copywritten information as your own. This article can be found verbatim

here -http://ezinearticles.com/?Get-Rid-of-Your-Unneeded-Mortgage-Insurance&id=181858

Is it typical for a mortgage insurance premium financed on a home loan of 158000 to be 2700?