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I took out and fha loan after 5/3/2013 can I lower the length mip to 11 years?

Ok I took out a fha loan after 5/3/13 I currently pay mip for the life of the loan, my question is now that I have at least 15% equity can I refinance my fha loan to the 11 year rule?I have a foreclosure on my credit so conventional loan is out the door.. And I know they are lowering mip already by hbset_757_393 from Brea, California. Jan 9th 2015 Reply


Larry Gray (lgray_312_247)
#563 ranked lender in California - 1,127 contributions

www.hud.gov/lenders may well provide your answer to the 11 year rule. I understand you must wait the mandatory 210 day period and have made six payments on their existing FHA loan before refinancing through a streamline loan in order to secure the lower MIP. It seems like you have met that standard. The reduced premiums will be unavailable on loans with terms of 15 years or less (the annual MIP for those loans is already less than the new MIP amounts for 30yr loans). Also, The reductions DO NOT apply to streamline refinancing of existing FHA loans that were endorsed on or before May 31, 2009 (these also have lower MIP already--.55). The new MIP will not be available either for Section 247 loans which are specific to the Hawaiian Homelands.

Jan 9th 2015
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Phil Dumouchel (PhilDu)
#1 ranked lender in South Carolina - 2,228 contributions

You can take advantage of the new rate but the FHA insurance is still for the life of the loan unless you change to a 15 year loan. Conventional would definitely be preferable but depends when it happened. Let me know if I can help!

Jan 9th 2015
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Larry Gray (lgray_312_247)
#563 ranked lender in California - 1,127 contributions

In your scenario it looks like you can expect to go by the 11 year rule or to the end of the term should you have the amount of equity you state.I sent you to a website and perhaps that was hasty as I focused on the lowering of the monthly moregage insurance. Here is what you find researching HUD.gov:How do I determine when the Annual MIP will be canceled?Cancellation of the FHA monthly mortgage insurance premium (MIP) is based on several factors including the loan term, loan-to-value (LTV) and regulations in place when the loan is closed, or the case number was assigned, as applicable. For loans with FHA case number assigned on or after 06/03/13, FHA will collect Annual MIP for the maximum duration permitted as described in ML 13-04: All Loan Terms (Greater than 15 years and less than or equal to 15 years) LTV greater than 90% Annual MIP will be collected until the end of the loan term, or 30 years, whichever occurs first. LTV less than or equal to 90% Annual MIP will be collected until the end of the loan term, or 11 years, whichever occurs first. For loans closed (or case numbers assigned, as applicable) 01/01/01 - 06/02/13, Annual MIP will be automatically cancelled when the LTV reaches 78% as follows: Loan Terms Longer Than 15 Yrs To be eligible for automatic cancellation the monthly MIP must have been paid for a minimum of five years. Loan Terms 15 Years or Less There is no minimum time period for which the MIP must have been paid (five year requirement does not apply). If the LTV is 78.00% or less at loan closing it is exempt from MIP. NOTES - For loans closed (or case numbers assigned, as applicable) 01/01/01 - 06/02/13 o MIP cancellation does not apply to loans that are not insured by the Mutual Mortgage Insurance (MMI) fund. Generally, loans closed prior to January 1, 2001 will not be eligible for cancellation of MIP, which is collected as part of the monthly mortgage payment. o Cancellation of the annual MIP is normally based on the scheduled amortization of the loan. However, in cases where the loan payments have been accelerated or modified, cancellation can be based on the actual amortization of the loan as provided to FHA by the servicing lender. o Mortgage insurance may also be terminated via payment in full, conveyance for insurance benefits, or voluntary termination upon agreement between the borrower and lender. o Although the MIP is cancelled, the contract of mortgage insurance remains in force. The changes to the duration of the annual MIP described in ML 13-04 do not apply to Title I or Home Equity Conversion Mortgages (HECMs). Mortgagee Letters are available at http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/letters/mortgagee ML 13-04, ML 11-35REFERENCEML 13-04, ML 11-35REFERRAL LOCATIONDISCLAIMERAll policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Jan 9th 2015
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