topic Options to remove PMI on a 2 year old FHA loan? in Mortgage Loans

Options to remove PMI on a 2 year old FHA loan?

bbuhbowler — Thu, 25 Aug 2022 14:23:50 GMT

I have a 2.75% interest rate and my mortgage company says I am stuck with this for the life of the loan or with a refi. Refi rates are way higher than 2.75 now even with good credit. middle score in the 740s.

amount owed is 175k and similar houses in my neighborhood are selling at 305-330k

Are there any other options?

Re: Options to remove PMI on a 2 year old FHA loan?

ShanetheMortgageMan — Thu, 25 Aug 2022 15:01:58 GMT

Unfortunately nope, the only way to get rid of your FHA loans PMI is to refinance into a conventional loan. Your PMI will decrease every 12 months though, slightly, as it's recalculated at .85% (or whatever your PMI rate is) of the loan amount, then divided by 12 months. So if your loan amount is $175,000 then at .85% it'd be $1,487.50/year or $123.96/mo. Then in 12 months if your loan amount is $171k then it'd be $1,453.50/year or $121.13/mo, etc.

Re: Options to remove PMI on a 2 year old FHA loan?

bbuhbowler — Thu, 25 Aug 2022 18:09:01 GMT

Thank you Shane! That is at least some silver lining

Re: Options to remove PMI on a 2 year old FHA loan?

gorgon — Fri, 01 Mar 2024 20:00:20 GMT

@ShanetheMortgageMan wrote:
Unfortunately nope, the only way to get rid of your FHA loans PMI is to refinance into a conventional loan. Your PMI will decrease every 12 months though, slightly, as it's recalculated at .85% (or whatever your PMI rate is) of the loan amount, then divided by 12 months. So if your loan amount is $175,000 then at .85% it'd be $1,487.50/year or $123.96/mo. Then in 12 months if your loan amount is $171k then it'd be $1,453.50/year or $121.13/mo, etc.

Sorry to resurrect an old thread, but this is great to know. I have not found the underlined info anywhere else. Thanks @ShanetheMortgageMan

Re: Options to remove PMI on a 2 year old FHA loan?

ShanetheMortgageMan — Fri, 01 Mar 2024 20:55:38 GMT

You're welcome, glad the info helped!