Eliminating Mortgage Insurance From FHA Loans
Want to know about eliminating mortgage insurance on your FHA home loan in Tooele UT? Get rid of that big fee and reduce your monthly payment by $100, $150, or even $200.00 a month. Here are some ideas to point you in the right direction.
Many buyers who select FHA loans were persuaded by the low down payment feature. Because mortgage insurance is typically required on mortgages for greater than 80% of the purchase price, most FHA buyers have mortgage insurance fees included in their monthly payment. The process for having that charge eliminated depends on when the mortgage was issued by FHA. The following information is on eliminating mortgage insurance from FHA loans issued before June 3, 2013 in Tooele UT.
Eliminating Mortgage Insurance on a Pre-determined Schedule
In Tooele as in other parts of the country,with each mortgage payment sent in, you pay down a fraction of your loan. In the first years, the amount for interest is greater than the amount for the loan balance, but this steadily shifts. Mortgage insurance is ultimately terminated when the principal is paid down to 78% of the initial purchase price. You may also make extra contributions towards principal to reach this mark quicker.
With a majority of loans, you may demand that mortgage insurance be eliminated when the balance reaches below 80%. It definitely makes sense to monitor this to save on mortgage insurance fees for several additional months. Read your mortgage documents to verify that this is included.
Improvement in Market Values
LTV ratios are determined by your principal balance and the initial price of the home or its current price. If Tooele house values go up enough, your current balance might be less than 80%, eliminating mortgage insurance as a result. In order to eliminate mortgage insurance using this process, you must call your Lender to request an appraisal. The Lender will send you an invoice for the fee, but it pays for itself if your mortgage insurance is eliminated as a result. Additionally, you must have your mortgage for 5 or more years to have mortgage insurance eliminated.
More on Eliminating Mortgage Insurance From FHA Loans
Mortgage terms typically change over time. The above is purely an overview of typical FHA mortgage conditions. It is essential to review your specific paperwork regarding eliminating mortgage insurance from FHA loans. You may also reach out to a Tooele loan officer for more information.
Don't know a loan officer? Call me. Chris Sloan 435-840-5031. I know the best in the business.
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