PMI and FHA mortgage....

[Tinker'n'Fun]

Is it true that with a FHA mortgage PMI lasts the life of the loan and can not be removed at the 20% mark of the loan.

When we got the loan we did not put 20% down. We have paid faithfully and are past 20% equity in the house. I asked for the PMI to be removed and received a letter that FHA mortgages do not work this way.

Is the bank trying to pull one over me, or was I mis-informed when we took the loan out?

Thanks to anyone who can help.

 

[LoriKutchey]

Here's what I found online for you:
http://www.ehow.com/how_6746894_remove-pmi-fha-loan.html

 

[okeydokey]

That is correct, unless you refinance and you have over 20% equity.

 

[ICF]

Once the LTV is down to 78% PMI can be dropped....just b/c you have it at the beginning doesnt mean you have to carry it for the full 30 year term of the mortgage.

 

[patsal]

It is true, and it does indeed stink! I just accelerated my mortgage and paid it off in 12 rather than 30 years, so ha ha no more PMI for you dear bank after Novemeber!

 

[Tinker'n'Fun]

It is true, and it does indeed stink! I just accelerated my mortgage and paid it off in 12 rather than 30 years, so ha ha no more PMI for you dear bank after Novemeber!

May I ask what you added to your mortgage to decrease the term so much. We have under $50,000 to pay off so I thought you have the right idea. Do you think $100.00 per month is too little? What would you recommend?

 

[okeydokey]

Google mortgage calculator and you will find sites where you punch in your info and your additional payment per month and they will tell you how long it will take to pay off your mortgage.

 

[secretpantssam]

I was told that after I have paid off 20% the PMI would be dropped.

 

[Tinker'n'Fun]

I was told that after I have paid off 20% the PMI would be dropped.

That is what I was told also, but the bank said because I have a Federal loan that the PMI is for the life of the loan and can not and will not be dropped in any circumstance. Love how upfront they are when they want your business. They tell you what you want to hear, then when it comes time to own up, they take it all back....

 

[Where'sPiglet?]

I believe my FHA paperwork states when the mortgage is 20% paid off AND 5 years into it. I didn't pull it out to check, but I think that's what it states.

 

[Tinker'n'Fun]

I believe my FHA paperwork states when the mortgage is 20% paid off AND 5 years into it. I didn't pull it out to check, but I think that's what it states.

I'll have to check my paperwork. That is what I remembered, but when I formally requested it, I was denied stating that FHA were disqualified from this. Now the hard part will be finding the paperwork. I wish I was a bit more organized!

 

[bdcp]

I'm pretty sure on FHA loans it's for the life of the loan. For conventional mortgages, it can be removed when you hit 20% equity, but not always. We have had FHA loans in the past and the PMI was only removed when we refinanced or sold (portion refunded if during a certain amount of time). After a certain period, it's not refundable. PMI on FHA loans is paid as a lump sum and not as a monthly amount so that's why it's not removed at 20% equity. I think some posters are confusing loan types. FHA loans are not the same as conventional loans.

 

[HHSTigerFan]

FHA's monthly mortgage insurance payments will be automatically terminated when these conditions occur:

* For mortgages with terms 15 years and less and with Loan to Value ratios 90 percent and greater, annual premiums will be canceled when the Loan to Value ratio reaches 78 percent regardless of the amount of time the mortgagor has paid the premiums.
* For mortgages with terms more than 15 years, the annual mortgage insurance premiums will be canceled when the Loan to Value ratio reaches 78 percent, provided the mortgagor has paid the annual premium for at least 5 years.
* Mortgages with terms 15 years and less and with loan to value ratios of 89.99 percent and less will not be charged annual mortgage insurance premiums.

 

[Tinker'n'Fun]

FHA's monthly mortgage insurance payments will be automatically terminated when these conditions occur:

* For mortgages with terms 15 years and less and with Loan to Value ratios 90 percent and greater, annual premiums will be canceled when the Loan to Value ratio reaches 78 percent regardless of the amount of time the mortgagor has paid the premiums.
* For mortgages with terms more than 15 years, the annual mortgage insurance premiums will be canceled when the Loan to Value ratio reaches 78 percent, provided the mortgagor has paid the annual premium for at least 5 years.
* Mortgages with terms 15 years and less and with loan to value ratios of 89.99 percent and less will not be charged annual mortgage insurance premiums.

Can you state where you cited this from. My loan is a 30 year and we have been paying for over 10 years. The Loan to Value ratio is less than the 78%. My PMI is paid monthly and every payment has been paid on time (auto-deduction from the first payment on). The bank has twice refused my request and I need to educate myself, so if you can tell me where this is from it would be helpful.

 

[HHSTigerFan]

http://www.fha.com/fha_requirements_mortgage_insurance.cfm

 

[Jeff_G]

I removed my yearly PMI from my FHA loan when I hit the 78%, It did not come off automatically I had to call my mortgage company and request that it be removed.

For the 78% are you going by appraised value or original loan value? My bank said they would not consider the appraised value or any new appraisal, only when I was below 78% of the original loan amount. If you are both below 78% of the appraised value and original loan balance I would look to refinance.

 

[disneychrista]

I was told that after I have paid off 20% the PMI would be dropped.

This is what I was told too. I was also told that it would be many years before this happened.