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Profile picture for Bulka14

New to Mortages

I have a few questions with mortgages. I have heard many reports about mortgage insurance and that it will last for the entire loan or on to the 80% of the principle...Which is right?
Also if the insurance is the entire life, what are some ways of getting around it?

Thanks.
  • December 06 2013 - US
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Answers (7)

HI Bulka14

it's all depending on loans option, 
 
under conventional qualification you may select no mortgage insurance depending on credit and term.

in short there are many program and selection which you can avoid mortgage insurance . 

good luck

Omar Khamisa
 
  • December 08 2013
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Profile picture for PaulMcCausland
There are a fair amount of variables to consider for your particular situation. I agree with the other posts in regard to FHA being lifetime, but there are conventional loans where you can avoid mortgage insurance with 10% down, and some with only 5% down. Like I said  though, there are a fair amount of variables. Please contact me to review the possibililtes.
I'm here to help,
Paul
  • December 08 2013
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Profile picture for Brent Tye
FHA started the life of loan mortgage insurance this year. 
  • December 07 2013
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Great question! As of this year FHA made mortgage insurance mandatory for all loans no matter how much equity the borrower possesses. Conventional financing on the other hand only requires mortgage insurance when financing over 80% of the properties appraised value. If mortgage insurance was obtained through conventional financing it can later be removed once 20% equity or more can be documented. And through VA mortgage insurance is not required.

Please let me know if you have any additional questions.
  • December 07 2013
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There are loans where mortgage insurance falls off after you have a certain amount of equity in your home and there are other loans that have mortgage insurance that exists throughout the life of the loan. It depends and we would need more detail from you. One way to get out of this if you already have this problem is to refinance. If you still have more questions it would be best for you to speak with a lender directly about your situation. If you have any further questions or would like a loan, feel free to contact me. I hope this helps and good luck!
  • December 06 2013
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Profile picture for daveskow
there are too many variables in the answer to your question to  be accurate answering it ......need to know what type of loan program you are  asking about ?  and what original  loan to value is??  thanks
  • December 06 2013
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FHA loans, that are over 15 year term, and have less than 10% down payment, have monthly insurance premiums for the life of the loan. The soonest any FHA loan will drop MIP is after 11 years of payments.

Conventional loans still have rules that require PMI to be removed if loan reaches 78% LTV, and you can attempt to have PMI removed if you think you've reached a 20% equity position.

You can avoid PMI by putting 20% down, or by using a product like a VA loan, a HomePath loan, or a USDA loan.
  • December 06 2013
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