Will refinancing remove MIP?

Asked by Jodie, Riverside County, CA Sun May 20, 2012

I have an FHA loan from 2009. I did an FHA Streamline refinance in November, 2011 and got down to 4%. But I heard that if my homes value is up (and it is) and if I'm at 80%, I can do a refinance and get MIP removed. But then I heard I can't now because I already did a Streamline. So...what's the real story? Can I refi and get rid of MIP? and does it cost anything? The streamline was free so just curious. Please let me know.

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Elva Wormley, Mortgage Broker Or Lender, San Jose, CA
Mon May 21, 2012
Hi Jodie,

The only way to get out of the mortgage insurance is to refinance into a conventional loan at 80% LTV.

FHA requires mortgage insurance for a minimum of 5 years.

Best regards,

Elva A. Wormley
C2 Financial Corporation
2845 Moorpark Avenue, Suite 209
San Jose, CA 95128
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Claudia Mull…, Mortgage Broker Or Lender, Fremont, CA
Sun May 20, 2012
Jodie The below answers are spot on, but I do want to clarify something for you: your Streamline was not free.
You paid for it by either increasing your loan amount or setting your interest rate at a level that the rebate associated with that rate paid for your loan amount (mortgage banked or direct bank lender).
There is no such thing as a free lunch! :)
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Mario Gonzal…, Agent, Riverside, CA
Sun May 20, 2012
Hello Jodi !

Mortgage Insurance and Refinancing are not necessarily tied to each other.

Mortgage Insurance ( MI ) has both a time (number of minimum years) and equity target (usually 21%) . If BOTH are met, then its a matter of filling out an application and submitting supporting sales data to you present lender to have them process and remove the MI.

Please call your lender to ask how many years MINIMUM was your MI suppose to be for - then double check against your loan documents (ask them what page they are looking at for answer).

If you are still within the years of forced MI , AND you have the 21% equity - then you have to consider the amount of monthly MI vs how many months left - vs cost of refinancing and end results with refi. - A refi with 21% equity should get you a new loan without MI from the start.

I have a really honest and upfront loan officer I could recommend you to. I shop him for all of my clients and he still comes up on top --

Call or Email me for his info:

Most Kindest Regards,
Mario Gonzalez
email: MariogRealty@gmail.com
JD Power & Associates Ranked #1 Buyer Satisfaction 2008, 2009, 2010
Chase Bank Preferred Agent 2008, 2009, 2010, 2011
Short Sale & Pre-Foreclosure Certified *
REO Buyer Agent & Distressed Property Certified
DRE LIC 01708214
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