Thinking of Getting an FHA Loan? Changes to Mortgage Insurance requirements on FHA loans are coming as of June 3, 2013.
Mortgage Insurance (MI) is a premium paid by
borrowers who don't meet certain minimum equity requirements, like not
putting at least 20% down so your loan to value (LTV) is over 78%. It
used to be that after you reached 78% equity in your home you could
cancel the MI. Not so any more. If your LTV starts at 90% or more, you
will have to pay MI for the duration of your loan, even if you go below
78% equity. Considering a benefit of FHA loans is that they allow
borrowers to put down only 3.5%, it means pretty much all FHA borrowers
will have to pay more mortgage insurance.