YOU ASK:

How long must you pay mortgage insurance on FHA loan?

WE ANSWER:

For an FHA loan, you must pay for mortgage insurance for not less than five years, or, until you are able to pay off 22% of your FHA loan.

The 22% is deemed sufficient to assure FHA that you will not be walking away from the loan when you think that it has gotten too heavy for you to continue.

If you are able to pay 20% down payment at the start of the purchase, you actually don't need to pay for mortgage insurance. However, if you can't afford to pay this amount as a down payment, you will be required to take out mortgage insurance on your FHA loan. This enables you to pay a down payment of as low as 3.5%.

When in the past, FHA borrowers have had to pay mortgage insurance premiums for the life of the mortgage, now you are able to cancel your mortgage insurance when you meet the requirements. There are also cases when FHA will automatically cancel mortgage insurance once you reach five years or 78% loan to value.

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