Thinking of Getting an FHA Loan? Changes to Mortgage Insurance requirements on FHA loans are coming as of June 3, 2013.
Mortgage Insurance (MI) is a premium paid by borrowers who don't meet certain minimum equity requirements, like not putting at least 20% down so your loan to value (LTV) is over 78%. It used to be that after you reached 78% equity in your home you could cancel the MI. Not so any more. If your LTV starts at 90% or more, you will have to pay MI for the duration of your loan, even if you go below 78% equity. Considering a benefit of FHA loans is that they allow borrowers to put down only 3.5%, it means pretty much all FHA borrowers will have to pay more mortgage insurance.
Mortgage Insurance (MI) is a premium paid by borrowers who don't meet certain minimum equity requirements, like not putting at least 20% down so your loan to value (LTV) is over 78%. It used to be that after you reached 78% equity in your home you could cancel the MI. Not so any more. If your LTV starts at 90% or more, you will have to pay MI for the duration of your loan, even if you go below 78% equity. Considering a benefit of FHA loans is that they allow borrowers to put down only 3.5%, it means pretty much all FHA borrowers will have to pay more mortgage insurance.
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