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I'm trying to calculate how much equity I have in my home, so that after reaching 78% (or 80%?) I can cancel the FHA MPI (obtained prior to 2013). The valued price of the home was $200K per the home builder. My financed costs (i.e. original loan amount) was $208K, which included all applicable fees. I now have a principle balance of $178K, but am unsure which value to use ($200K or $208K) in calculating current percent equity.
asked Dec 30, 2017 in FHA Loans by anonymous

1 Answer

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Your loan-to-value, for the purposes of this calculation, is your current loan balance divided by the LOWER of the original purchase price or appraised value. You would have received an appraisal when you got your FHA loan.

Assuming that it came in at $200,000, and that you paid $200,000 for the property, you'd be able to cancel your FHA policy when your balance hits $156,000.

Currently, your home equity is 89 percent ($200k / $178k). However, if your home has increased in value, you may be able to drop your mortgage insurance by refinancing to a conventional (non-government) mortgage.
answered Dec 31, 2017 by GinaPogol (22,130 points)
edited Jan 4 by GinaPogol
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