Does FHA PMI cancel automatically? If not, how and when can i cancel it?

The schedule for getting rid of FHA mortgage insurance changes by loan term. o30-year loan term : Annual MIP is automatically canceled once the loan reaches 78% loan-to-value and annual MIP has been paid for at least 60 months. o15-year loan term : Annual MIP is automatically canceled once the loan reaches 78% loan-to-value. There is no requirement for MIP to be paid for at least 60 months.In other words, if you have a 30-year fixed rate FHA mortgage, you must pay mortgage insurance for at least five years before it can go away regardless of your loan balance or LTV. By comparison, if you have a 15-year fixed-rate FHA mortgage, your mortgage insurance is removed as soon as your LTV is low enough.

It is supposed to cancel automatically once you loan balance is 78% of your original appraised value/sale price.. The lower of the two, and when a minimum of 5 years has passed.. However, because of the current market conditions, not all FHA loans are canceling MI automatically.. I have a client that has been fighting FHA for 3 months now trying to get him MI to drop... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

It is true that MIP, and PMI for that matter, are supposed to cancel automatically, but don't wait. The federal law that mandates when and how PMI is cancelled is found in the Homeowner's Protection Act of 1998 (HPA). For Conventional loans the borrower is allowed to ASK at 80%, but if the borrower does not ask, then the lender MUST at 78%. FHA and VA are not bound by this rule, but as a matter of practice they have followed it. The calculation is based on the original appraised value, not the current value. In the case of a loan where the purchase price is less than the appraised value, then the purchase price is the prevailing value. The lender is not required to use the current appraised value, if higher, to justify the LTV. The kicker is that not all loans automatically apply. There is a provision that allows the lender to require the PMI stay in place for certain loans identified as "High Risk" loans and to loans originated prior to July 29, 1999.My advice is to ask your lender by phone and in writing to cancel PMI. If you are already below 78%, demand that they refund to you the premiums that were collected in violation of HPA. IF your loan is FHA, you can ask, but you really are subject to them complying. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Licensed in California and Arizona ~ www.LoansA2z.com 888-889-9950

Currently yes and for any current mortgage it looks like that will not change. When the balance on the loan reaches 78% of the original purchase price it should be cancelled automatically. You can inquire on the status through the loan servicer (where you make your payment). There is talk that at some point future loans will have the FHA PMI for the entire life of the loan - something that will make FHA loans much less competitive and desirable.

and if your servicer is giving you a hard time, order a fha appraisal , and send that in linda

The Mortgage Insurance should automatically drop off when you have attained 78% loan to value ratio(based on the lower of sales price and appraised value). However, I would not forget about it and assume it will happen. Make sure it does! you can easily view your amortization table in order to see exactly when your Pricipal Balance will reach the desired amount. As others have noted, you will also need to have made a minimum of 60 monthly payments before your MIP can be removed on a 30 year loan, regardless of Loan to value. 15 year does not have that restriction. If you have any further questions, contact me. We are a Direct Lender in the State of NY. Peter Botros, PBotros@OmegaLoans.net