When can you cancel Mortgage Insurance?

When can you cancel Mortgage Insurance?

Starting on June 3 of this year the Federal Housing Administration’s new policy on mortgage insurance premiums (MIP) went into effect.  See how and when you can cancel mortgage insurance.

Question 4 property guidingIf you have an FHA loan:

  •  If your down payment is greater than 10%, the MIP will be assessed for the first 11 years of the loan.
  •  If your down payment is less than 10%, the annual MIP will be assessed for the life of the loan.

The same is true on refinances.  On refinances, if the loan to value (LTV) is greater than 90% of the appraisal, the MIP will be assessed for the life of the loan.  If the LTV is less than 90% of the appraisal, then the MIP will be assessed for the first 11 years of the loan.

If you have a Conventional loan:

On a conventional loan borrower paid mortgage insurance (PMI) can be cancelled after –

  •   The loan is paid down to 80% of the original purchase price if the borrower sends a written request to have it cancelled.
  •   If the borrower does not do send in the request, the PMI will cancel automatically when the loan is paid down to 78% of the original value of the home.
  •   An appraisal can be done that reflects the LTV is less than 75%.  Of course, the loan needs to be in good standing to have your PMI cancelled, if you have been delinquent with any payments, your chances of having your PMI cancelled isn’t very good.

Although we do not offer mortgages, we feel that any information in the real estate industry that we can share is always a plus for our customers.

Title Junction is a full service real estate title company serving the area of Fort Myers, Cape Coral and the entire state of Florida since 2005. The company handles a number of real estate title services for both commercial and residential properties. Employees of Title Junction can also act as a witness in courtesy closings as well as an escrow agent or a notary public.

Please contact Jennifer Ferri of Title Junction, LLC for further information @ 239-415-6574 or www.title-junction.com

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Posted on August 16, 2013, in Title and tagged , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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