How to cancel FHA Annual Mortgage Insurance Premiums after January 1st, 2001.

• 15-30 Year Term Mortgage: Homeowner reaches 78% Loan to value on house and has paid a minimum of 5 years.

• 0-15 Year Term Mortgage with loan to value 90% or more: Homeowner reaches 78% Loan to value on house with NO minimum paid annual mortgage premiums.

• 0-15 Year Term Mortgage with loan to value 89.9% or less: will be cancelled

FHA will determine when a borrower has reached the 78% loan to value ratio based on the lower of the sales price or appraised value at the time of the sale. New appraised values will not be considered.

When the homeowner has made additional principal payments, the borrower may request cancellation of his/her mortgage insurance if the loan to value ratio has reached 78%, has paid mortgage insurance for at least 5 years and has not been delinquent for more than 30 days at anytime
within the prior 12 months.

Hopefully these quick tips and guidelines can help determine to cancel the mortgage insurance premiums with FHA.  Keep in mind these guidelines don’t apply to conventional PMI guidelines that will be explained in my next post.

FHA is still a great loan being used still because of the government backing pretty much guaranteeing you a refinance in the future via the Streamline product unlike conventional loans nowadays which have resulted in losses due to not being able to refinance out.