Mortgage FAQ: Does the Mortgage Insurance Requirement Go Away After a Certain Period of Time?
"I HAVE AN FHA MORTGAGE AND I’M REQUIRED TO PAY MORTGAGE INSURANCE. I’VE HEARD THAT THE INSURANCE REQUIREMENT WILL BE AUTOMATICALLY CANCELED AFTER A CERTAIN AMOUNT OF TIME. IS THIS TRUE?"
Although the mortgage insurance premium (MIP) on some types of FHA loans is canceled after a set number of years, many types of FHA mortgages have insurance premiums that last for the entire loan term. For example, if you made a down payment of less than 10 percent on a 30-year FHA loan—a fairly common mortgage—that was issued after June 3, 2013, the mortgage insurance requirement will last for the life of the loan.
To see if the mortgage insurance premium on your particular FHA loan is automatically canceled after a certain number of years, you’ll need to check with your mortgage provider. That being said, if you’re looking to get out from under the MIP on your FHA loan, you may be able to refinance out of an FHA loan into a conventional loan with no mortgage insurance. With today’s low interest rates, you can save money on the interest rate that you get along with cutting out the mortgage insurance requirement. Keep in mind that your ability to refinance your current loan will depend on a variety of different factors. Also, you’ll need to calculate whether or not refinancing is the right financial step for you.
For more than 25 years, Omega Financial has been serving mortgage clients in Massachusetts. Our brokers have approximately 50 years in the mortgage business. You always will receive fast, courteous, and accurate information. Omega Financial, Inc. is a company duly licensed to operate in Massachusetts as a Mortgage Brokerage. We are located in the Town of Norwood, Massachusetts where we have been operating as Omega Financial Incorporated since 1988.
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