cancel
Showing results for 
Search instead for 
Did you mean: 

FHA MIP clarification

tag
p-
Valued Contributor

FHA MIP clarification

FHA experts:  I opened an FHA home loan in June of 2009.  This summer I will hit my 5 years of repayment, but will not have paid down to 80% of the original appraisal.

 

The home was a short sale, and with market recovery I conservatively have about 25 to 30 percent equity.

 

I have read in a few places that although I have to get to 78% of the original value to have it automatically removed, I can petition to have it removed with an appraisal that shows the required LTV.  

 

Is this true?

 

 

Message 1 of 4
3 REPLIES 3
ShanetheMortgageMan
Super Contributor

Re: FHA MIP clarification

It doesn't work that way with FHA.  When you got your loan, the guideline was that you had to pay the annual MI for at least 5 years and until your mortgage balance reached 78% of the value used when you obtained the FHA loan (which is the lower of the purchase price or appraised value).  The "petition" method only works on conventional loans.

 

Now depending on your situation you may benefit from refinancing to get rid of the annual MI.  Your credit scores certainly look good enough for that to be a possibility.

Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 2 of 4
DallasLoanGuy
Super Contributor

Re: FHA MIP clarification

i think i am just going to put 'Shane is right' in the signature...... 

 

;-)

 

Retired Lender
Message 3 of 4
p-
Valued Contributor

Re: FHA MIP clarification


@ShanetheMortgageMan wrote:

It doesn't work that way with FHA.  When you got your loan, the guideline was that you had to pay the annual MI for at least 5 years and until your mortgage balance reached 78% of the value used when you obtained the FHA loan (which is the lower of the purchase price or appraised value).  The "petition" method only works on conventional loans.

 

Now depending on your situation you may benefit from refinancing to get rid of the annual MI.  Your credit scores certainly look good enough for that to be a possibility.


Thanks... that's what 90% of my own digging has found.  I ran the numbers on a refi, but because I am likely selling in the next year or two, and my rate is already at 4.5, it's doesn't pencil out.

When I read about petitioning based on new LTV I should have known it was too good to be true.

 

Thanks for responding, guys.

Message 4 of 4
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.