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FHA loan and mortgage insurance

If I pay 30% down on an FHA loan with a non-occupant co-borrower, am I still required to get mortgage insurance? by meryla_764_981 from Alexandria, Virginia. Aug 24th 2012 Reply


William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,008 contributions

YES... if you have 30% down, you should look at conventional financing.. There will be no MI.. However Non-occupant co-borrowers are only allowed on conventional loans where parents are helping children purchase a home.. FHA MI is 1.20% annually with 5% down, however if you go 15 years and put 22% down or more, there is no monthly MI.. Just the 1.75% upfront charge.. 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

Aug 24th 2012
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Joel Lobb (kentuckyloan)
#3 ranked lender in Kentucky - 192 contributions

FHA differentiates between a 30 year and 15 year fixed loan as to when you can cancel your FHA PMI :30 Year Loan Term - must pay the monthly insurance premium for a minimum of 60 months (5 years) and the loan must reach 78% loan-to-value (LTV) as a result of paying the loan down (amortization). LTV is not determined by the new home value, it's determined by the original sales price of the home. LAYMAN'S TERMS: If your original sales price was $100,000 - multiply that by 78%. You need to get your mortgage balance down to $78,000 before FHA will allow you to drop the PMI.15 Year Loan Term - there is NO requirement that MIP be paid for 60 months but the LTV must be 78%. LTV is based on paying the loan balance down, you calculate this the same way you do for a 30 year mortgage. Remember, this is NOT based upon the current appraised value or the current tax value of the house.How Can I Determine When I Will Reach 78% LTV?There is no set number of months it will take because it varies slightly based on the interest rate and size of the down payment. If you use Excel - you can easily find an amortization program that will tell you when your mortgage will be at the "sweet spot!" For a 30 year mortgage with 3.5% down, it will take between 9-10 years to get down to 78% LTV.A 15 year fixed mortgage will pay down to 78% LTV between 2-2.5 years. Remember, FHA does not require 15 year loans to keep the annual MIP for a minimum of 60 months.How to Remove or Cancel FHA PMI QuickerIt is possible to eliminate or get rid of the FHA mortgage insurance premium quicker if you make extra payments to the principle, but only after 60 months has passed (assuming you have a 30 year loan). FHA goes off the scheduled amortization schedule to determine when you will reach 78% LTV up until 60 months.Refinance -If you you think you have 20% equity in your home but don't meet the 60 months or 78% LTV based on the original purchase price or appraisal criteria, it may be possible to refinance into a conventional loan. If you don't have 20% equity, and have VA loan eligibility, you could refinance into a VA loan. A VA loan requires no monthly mortgage insurance and we can go up to 100% LTV on a VA refinance.Little known fact: Mortgages with terms 15 years and less, with 90% LTV or lower, do not have to pay monthly FHA mortgage insurance......ever!

Aug 24th 2012
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Linda Wintersteen (Linda123)
#3 ranked lender in Arizona - 1,252 contributions

yes,, fha has a requirement for mortgage insurance..if you are doing 30 yr fixed loan... remember it s govt agency do you have to go fha? there might be another way to goemail me at your loanpartnerforlife@live.com

Aug 24th 2012
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Phil Goldberg (PhilGoldberg)
#26 ranked lender in Virginia - 3 contributions

Merla,Are you going to be the occupying borrower? You could do a conventional loan up to $417,000 and definitely avoid the upfront mortgage insurance premium as well as the monthly mortgage insurance. Fha requies mortgage insurance no matter what the down payment is.Feel free to call me regarding your mortgage needs.Thanks,Phil GoldbergProspect MortgageOFC 703-912-9122Cell 703-929-7608email philgoldberg1@gmail.com

Aug 24th 2012
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#28 ranked lender in New York - 2,236 contributions

Unless you do a 15 year FHA you will have to pay MI. Why are you getting a FHA loan if you are putting 30% down? Is your debt to income ratio over 45%? If your DTI is 45% or lower you can do a conventional Freddie Mac loan with a non-occupant co-borrower and pay no MI. If this is the case speak with some mortgage brokers that cover VA do not go to a big bank.

Aug 24th 2012
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