FHA Mortgage

lorraine67 · #1 (**permalink**) 11-15-2006, 03:20 PM

We are refinancing to a FHA mortgage, and I have heard that they do not require PMI insurance, is this true?

genmed · #2 (**permalink**) 11-15-2006, 06:45 PM

Unless there are changes (from 2 years ago) FHA Mortgages do require PMI (FHA Mortgage Insurance) until you have 20% equity in the home. If you have 20% equity and have paid all your payments as agreed you can drop the PMI. If you have 20% equity (because of the refinance) you may not have to pay the PMI.

Diolla · #3 (**permalink**) 11-16-2006, 05:25 AM

I have heard that FHA loans do not drop PMI even after 20% equity.

poundwise · #4 (**permalink**) 11-16-2006, 05:31 AM

FHA loans do not have PMI. At least, not exactly. They have MMI.

MMI stands for mutual mortgage insurance. It is dropped after a certain percentage, around 20%, if other conditions are met as well.

Article: Bankrate.com - For FHA mortgages, it's PMI by another name

fairy74 · #5 (**permalink**) 11-16-2006, 08:45 AM

Poundwise is correct. After 20% you must make a written request for FHA to drop the MMI. If you don't make this request they don't drop it, so you must keep track very carefully! Also once you make the written request they are not particularly "speedy" in applying your request---so be prepared to spend quite a bit of time on follow-up

vishenda · #6 (**permalink**) 11-16-2006, 09:10 AM

FHA is for buying a house. I don't think you can re-fi from conventional to FHA.

Also, when buying a house, the PMI (Private Mortgage Insurance) is what insures conventional loans. FHA loans are insured with what's called MIP (Mortgage Insurance Premium). With less than 20% equity, it's gotta get paid to somebody.

Make sure that the lender you're using is reputable - some will re-fi you, just to make their money even if there is little or no benefit to you.
Hope this helps

lorraine67 · #7 (**permalink**) 11-16-2006, 01:17 PM

Quote:

Originally Posted by poundwise

FHA loans do not have PMI. At least, not exactly. They have MMI.

MMI stands for mutual mortgage insurance. It is dropped after a certain percentage, around 20%, if other conditions are met as well.

Article: Bankrate.com - For FHA mortgages, it's PMI by another name

This is what I have heard also...just wanted to be sure it was correct.

Thanks!!