What you and your clients should know!
Dropping Conventional Mortgage Insurance Rules
Automatic Termination
Fixed Rate & Adjustable – Removed when reduced to 78% LTV
LTV based upon ORIGINAL VALUE
Based SOLEY on regular amortization (not prepayment of principal)
Additional Requirement:
Mortgage payment must be current
Borrower Requests Termination
Fixed & Adjustable – Removed when reduced to 78% LTV
Additional Requirements:
Submit cancellation request in writing
Good payment history
Current on mortgage payments
Appraisal or Certification that property value has not decreased BELOW the original value
No second liens or subordinated loans on property
** Note: Call for special information on how to apply for possible termination in 2 years
Dropping FHA Mortgage Insurance Premium Rules
For all loan types with the exception of Title 1 and Home Equity
For Conversion Mortgages (HEICM) the following chart applies:
Estimated Number of Years To
Drop Mortgage Insurance Chart
At application, do the math and let your clients know the estimated number of years that the PMI or MIP will be eliminated. The interest rate makes a difference, but here’s an example of a sales price/appraisal value of $250,000 at 6% interest rate, and based on making regular monthly payments (no principal pre-payment).
Loan-to-value figured on base loan amount WITHOUT UFMIP
Click here on on the image below to obtain a PDF copy of this informative report.
