How Do FHA and MI Premiums Compare?
August 28th, 2008 By Peter G. Miller
Private mortgage insurance (MI) premiums are generally paid on a monthly basis. Except for so-called “high risk” loans, coverage can be stopped once an owner has paid down at least 22 percent of the original loan amount. In practice, many lenders will allow borrowers to discontinue MI once they have 20 percent equity — the value of the property less the first loan. See your lender for details.
FHA works somewhat similarly. Borrowers can generally end annual mortgage insurance premiums once the original debt has been reduced by 22 percent and the loan has been in place for at least five years.
Speak with lenders for specifics.
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