Getting Rid of PMI on FHA Loan

The rule changed a few years back, now you have to wait a while (10 years?) and must have put a certain per of down-payment (can't remember) to get rid of Pmi. Otherwise it's for the life of the loan...unless you

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refinance to a conventional loan to get rid of it.

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Just make sure you do the math for your situation and see which one comes out ahead, including closing costs. But yeah that's a huge interest rate spread.

Damn. I guess I will have to wait for the rate to get closer to mine and make the jump. I can't stand throwing that $140 per month away.

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I can't stand throwing that $140 per month away.

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Yikes, yeah that's a lot. I'd certainly do some math if you are throwing away damn near 1700 dollars a year towards it...

Im in the same boat. I got a 3.75% which i won’t get now.

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I got rid of mine at the 5 year mark on a FHA loan. Like some have said there have been some changes since I got my loan in 2012.

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Yeah. When we were considering FHA, the MIP was the first thing I noticed, especially the premium that is put right back into the loan which basically negates a large percentage of the down payment (e.g., with the minimum 3.5% down, the LTV is 98.2% not the 96.5% from that down payment).

Anyways, looking more into it, it seems the Trump admin rolled back the ability to get rid of the MIP, which made a conventional mich more of a no brainer. I think PMI is a huge scam, but it’s much less than that MIP.

Edit: I was incorrect. Trump admin didn’t reverse the MIP removal (under Obama admin). I just have been confusing that with their reversal of a planned rate cut.

Rates are north of 5% now, if your in the 3’s may be cheaper to pay it vs converting to conventional loan.

Edit : MIP for life of FHA was implemented under Obama, not Trump

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Edit : MIP for life of FHA was implemented under Obama, not Trump

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I thought there was some rule that stated you could remove MIP on loans originated before July 2012 or 2013. Can't remember which year.

your rate really isn't what you think it is. When you add back the PMI you are paying a higher rate then what's on paper. when you reach the 20% equity point you need to refinance. Right now rates are in the 4.625% range . They will not be back to the 4% range without a massive recession in the country so don't wait around thinking that will happen. Also if you reach yr 10 in any loan you need to refinance to a 10 or 15yr term. A 30yr mortgage is front end loaded with interest so you are paying a small amount of your payment towards principal anyway.