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A Curious User
a year ago
We bought our home November of 2010. I was led to believe that I could request the removal of the MIP when our LTV hit 80%, or after 5 years. Can I now send a letter to the FHA and/or my bank requesting the MIP be discontinued?
 
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Bruce Reichstein... Answered 73 more questions
a year ago
Certain rules were in place for FHA insured loans pertaining to cancellation of the Annual Mortgage Insurance Premium (MIP) for case numbers assigned prior to June 3rd, 2013. New rules apply for case numbers assigned after that date. Dates for removal guidelines are critical.

Removal for a 30 Year Term – borrower must pay the monthly insurance premium for a minimum of 60 months and the loan must reach 78% loan-to-value (LTV) as a result of paying the loan down (amortization). LTV is determined by the original sales price on the closing statement and not the new value of the home.

Removal for a 15 Year Loan Term – For Loans that closed prior to June, 2012 – there is NO requirement that FHA MIP be paid for 60 months if the LTV is below 78%. LTV is determined by the original sales price on the closing statement and not the new value of the home.

How to Cancel the FHA MIP? While it states that FHA will automatically drop the monthly FHA MIP based on the amortization schedule, this is not always the case. We suggest contacting your mortgage servicer to make sure they are aware of your projected date for your MIP removal and for any other procedures needed.
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Joe Wallace... Answered 266 more questions
a year ago
The FHA official site has a page that addresses this question--http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/comp/premiums/prem2001

It states:

"Many homebuyers ask FHA if they can stop paying FHA monthly mortgage insurance premiums with their mortgages. FHA insures mortgages so that lenders will be encouraged to make more mortgages available for people. The FHA mortgage insurance agreement is between FHA and the mortgage company, so you must contact your mortgage company and ask them what they require to drop the insurance. Most mortgage companies will want you to have a substantial amount of equity in your home.

If the periodic (monthly) mortgage insurance premiums are paid up for an FHA case before schedule (i.e., accelerated payments were made and the unpaid principal balance is 78% or less), the month and year the last monthly insurance premium is assessed (final bill date) can be changed by the servicer or holder of the mortgage. However cancellation of the monthly premium can only be used for active risk-based cases that have a closing date after December 31, 2000 and a case number assignment date before June 3, 2013 and meet the eligibility requirements described in Mortgagee Letter 2000-46 (with Attachment).

For mortgages with an FHA case number assignment date on or after June 3, 2013, the FHA insurance can be terminated by the servicer or holder if the mortgage is paid in full before the maturity date."
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