Eliminating PMI

[tim2]

I bought a new home about 3 years ago and with a FHA loan I know I am supposed to pay PMI for a minimum of 5 years.   The homes in my neighborhood have gone up in value significantly since I purchased mine.   I don't want to refinance since I got an excellent rate at the time of my original loan and would have to pay a higher rate if I refinanced.  Is there any way of eliminating the PMI that I'm paying each month? 

[tooleman694]

You need 78 percent LTV based on your purchase price.

if your home value goes up you cant use that..

[BrianB_The_Loan_Professor]

78% of purchase price AND 5 years - it isnt as easy as it sounds

do the math - how long will it be until you get the payment down to 78%

Then add up how many months of PMI that is and get the total

Look at what the payments would be if you refinanced into a conventional loan at the higher rate with No PMI and see what makes the most sense -

if you have a rate in the low 3's then you wont save much with a refi into todays rates

in that case I would just stick with what you have and hope someday you will get rid of the PMI - 

Good Luck

B

[ezdriver]

I was told by my company's mortgage partner today that FHA no longer allows dropping of MI. Whether or not that current rule applies to older loans retroactively is something that you should check with you current lender.

[StartingOver10]

The change in PMI became effective for FHA case numbers issued as of June 3, 2013 and after.

The changes are not retroactive to case numbers issued prior to June 3, 2013.  Read FHA Mortgagee Letter 2013-04.

If the LTV for the FHA loan is greater than 90%  than the MIP (same as PMI) lasts the term of the loan for case numbers issued on or after June 3, 2013.

If the LTV is less than 90% the MIP lasts 11 years.