FHA Mortgage Insurance Premium Services
The FHA (Federal Housing Administration) is committed to making home ownership a reality for borrowers who might, in typical circumstances, be unable to afford to own a home. The FHA mortgage insurance premium only requires a 3.5% down payment, so if you’re in the majority who can’t afford to come up with a 20% down payment for a conventional mortgage, then you can take advantage of the FHA.
You have to know, though, that the MIP (mortgage insurance premium) is a component of FHA loan, which consists of a fee up front, and then an annual fee that’s paid in monthly installments. The mortgage insurance premium FHA MIP can be removed if you pay down the balance of the loan.
What Is Your Initial Loan?
Find out how much you owe by looking at the HUD1 statement your lender provided you at closing. This amount is on the last page of the statement, under “Loan Terms.”
Multiply the amount of your initial loan by 0.75. Then the FHA will cancel your MIP automatically if you’ve paid your FHA mortgage insurance premiums for the past five years.
Look At Your Principal
Take a look at FHA mortgage insurance premium chart and check out your last balance of FHA loan. This amount will show on the line next to “principal” or “loan balance.” Take this amount, and subtract it from the amount of your addition loan. This is what you still owe as mortgage insurance premium FHA, and it’s how much you’ll pay before you get to the 78% mark that will allow you to cancel your MIP.
Remember that FHA mortgage insurance premium guidelines and then consider the FHA mortgage insurance premium chart. It will allow you to cancel your MIP that eventually depends on the repayment terms of your loan, and how much you’ve borrowed. Mortgage insurance premium FHA remains in force for the full term of the loan, even once the MIP is cancelled.
Keep in mind that FHA loans that were taken out before the first of January, 2001, will not qualify for MIP cancellation. Borrowers who fall under this category will have to either refinance their FHA loan, or pay the balance amount of FHA mortgage insurance premium that one owes if they want to eliminate the MIP.