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Dropping Mortgage Insurance |
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Dear Edith: I don’t see why I need to continue to pay for mortgage protection insurance. My mortgage has been paid down a lot and I now have more than 20 percent equity in the home.My mortgage company says I must continue insurance for the entire length of the loan because my loan originated prior to July 29, 1999 and it is a FHA mortgage.True, I closed on the home on in December, 1998, and it is a FHA-insured home.But so what? |
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For FHA loans made after that 1999 date, mortgage insurance premiums are charged for five years, then dropped when the principal balance has been reduced to 78 percent or less of the original value.But with FHAs older than that, which yours is, the length of mortgage insurance coverage was set at the outset, depending on the amount of the down payment.If yours must stay on for the full term, you probably had little or no down payment. |
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Edith
Originally published on April 6, 2006 |
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