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I have a home i purchased 5 yrs ago (July 2012). I remodeled it and will be getting a new appraisal. After the appraisal i assume the LTV will be around 50%.

I contacted Wells Fargo and they say "Per the Department of Housing and Urban Development (HUD) regulations, new appraisals will not be taken into consideration"

Is this correct? Will the only way to get out of this extra insurance is for me to refinance?
asked Dec 31, 2017 in FHA Loans by Breakbeat

1 Answer

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Today's FHA loans require MIP for the life of the loan. But your mortgage, taken in 2012, does not fall into that category. Assuming that your original down payment was the minimum, you have to pay MIP for at least 5 years or until you have paid the loan down to 78 percent of its original balance.


With such a low loan-to-value, assuming that your property appraises as expected, you may be better off refinancing to a conventional (non-government) home loan and dropping mortgage insurance. That's assuming you can save significantly by improving the terms of your loan and dropping MIP.

I recommend that you first look at your amortization schedule and see how much longer you'd have to make payments to get to that 78 percent mark, add up the cost, and compare it to the cost of refinancing today. Any good mortgage lending professional should be able to help you with this.

Good luck, and thank you for writing.
answered Dec 31, 2017 by GinaPogol (47,650 points)

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