Skip to main content

Can You Eliminate FHA Mortgage Insurance? Mining for Gold!

Can You Eliminate FHA Mortgage Insurance?  Mining for Gold!

     A comment often heard regarding today's mortgage process is that it's "difficult" or tedious.  There are too many questions, requests for information, or details to navigate ...

     And while it is true that there can be much to gather, to do, to talk over, to digest for Borrowers ... as their Mortgage Originator, I see real positives in that. 


     Within all that info and detail gathered from mortgage applicants, lies opportunity.  

     The more info and detail I have at my disposal as your Originator, the better the possible outcome.  All revelations help me find the best options and mortgage program to fit your needs.

     The method of gaining the info and detail may seem many a bit slow and tedious, but as with miners panning for gold ... the end results can be very worth the effort.

     It's hard to find a better example of this being true than when talking about Mortgage Insurance.  And that's whether considering its implementation or elimination.  In both instances, the benefit or opportunity is discovered in the details.  

    It's true that there are plenty of details to be mined and considered too ...  

     I've already broken down much of that info down in 3 previous articles.  ("Understanding Private Mortgage Insurance. PMI: The Pros and Cons", "What is FHA Mortgage Insurance? How Does it Work?", and "How to "Replace" Mortgage Insurance".)  In those posts, I speak of the various nuances of Mortgage Insurance, both on Conventional Loans and on FHA Loans. 

    One important nuance to remember:  In the last few years, the FHA (Federal Housing Administration) has enforced Mortgage Insurance Premiums (commonly referred to as MIPs) for the entirety of the loan on 30-year loans.

     So with my clients (and others) who purchased a home in the last 2 to 3 years with FHA financing, there may be Refinance opportunities to be found.  Opportunity to:

  • Refinance their FHA Loan to a Conventional Loan 
  • Reduce or Eliminate Monthly Mortgage Insurance costs
  • Possibly lower their Interest Rate
     FHA Loan-holders with enough equity ... and high enough Credit Scores, can lower their Monthly Payment by lowering their Monthly Mortgage Insurance costs. 

     Or:  They may be able to avoid Mortgage Insurance entirely with a new Refinance Loan at 80% or less than their Current Appraised Value. 

     The following is a good example of this.  It walks you through the details and process utilized to make a decision regarding the possible elimination of FHA Mortgage Insurance.
     Consider all the many details and info needing to be mined, understood, and weighed in order to make a sound decision and move forward ...  

  • My clients' FHA Loan utilized on a new Construction Purchase 
  • Loan made in April of 2014  
  • Amount borrowed: $239,500
  • 3 1/2 Down Payment (Minimum Down Payment)
  • Monthly Mortgage Insurance Premium: $258  (Important to note:  In April of 2014, FHA had increased the factor to 1.35% of the Loan Amount for the Annual Mortgage Insurance calculation.  Since that time, the factor has been reduced to .85%. Proof that FHA can manipulate/change the cost of Mortgage Insurance Premiums.)
  • Market Conditions:  In their housing market, there had been more new construction and appreciating home prices 
  • Home Owner's monetary investment to home improvements
  • Value of those Home Improvements made to their property and quality of their home. (Resulted in a higher Appraised Value: $268,000)
  • With a Conventional Loan:  The Borrower's Loan-to-Value became 85% and reached the lowest level of Private Mortgage Insurance.  

     The process of gathering of all this information ... the act of seeking details personal to their individual financial and property scenarios, revealed and presented my clients' options for examination.  And opportunity.  

     They discovered they could reduce their Monthly Insurance Costs from $258 a month to $38 a month ...

     Think the process and effort is worth it?  $220 a month is quite a "gold strike" or savings ...

     It's important to keep in mind though:  Not every scenario can reap this positive ... or level ... or outcome.  Everybody's situation, and the details revealed during the process, are different.

     But it's equally important to remember:  Unless you take the time, make the effort, ask the questions, dig for the details regarding your personal situation ... you'll never know what could be possible.  Or IF you have options or opportunity to save. (Or possibly even sell and buy again.)

     As the old saying goes, "the devil is in the details" ...  

     But so's the "gold".  There may be "gold" to be discovered if you can Refinance your present FHA Loan to a Conventional Loan.  

     Only through the questions asked and details revealed throughout the process will we discover if those riches exist for you can be mined ... 

* Hoping to Buy or Refinance a home in New Lenox or elsewhere in the Chicagoland area? Contact me!  I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
     I can be easily found at:

Gene Mundt
Mortgage Originator - nmls #216987 - IL Lic. 031.0006220 - WI Licensed

American Portfolio Mortgage Corp.

nmls #175656

Direct: 815.524.2280

Cell/Text: 708.921.6331

eFax: 815.524.2281

Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking: 
Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago 
and the greater Chicagoland region, including: 
The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, 
Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, 
Romeoville, Naperville, etc.), DuPage County, the City of Chicago, 
Cook County, and elsewhere within IL & WI.

Referrals are Appreciated and Welcomed!


Popular posts from this blog

Property Addresses: Gettin' Down to the Nitty Gritty

Property Addresses:   Gettin' Down to the Nitty Gritty

Take just a second and read through the following statements ...

“The devil is in the details” 
... "in life, it is often the tiny details that end up 
being the most important"

"Get Down To The Nitty Gritty"

“Little details have special talents in 
creating big problems!” 

“Sweat the details”

"Success is the sum of details"

Details ...Details ... it's all about the details ...
     And I'll admit it, I'm a bit of a nerd about them.  My whole family is.  Details, the intricacies, the little things ... they matter to us.
When I was growing up, a typical conversation (and argument) between my brothers and myself at the dinner table or in the backyard centered around "details".  It didn't matter what the topic was, it was the minor differences ... the details about the topic ... that we argued about.  I'm sure we drove our parents crazy.  
Sports statistics and games ... minutiae rega…

Ready for Fall? It's Arriving Soon

Ready for Fall?  It's Arriving Soon

Friend ...

Maybe it's because football season has started. Maybe it's the kids being back in school. Or because the night air is cooler. But a sense of Fall has arrived here in Chicagoland ...

The Fall Season brings changes with it. Changes in temperatures. Changes to the clothing we wear. Our focus seems to shift with the coming of shorter days, falling leaves, and crisp air.

Fall can be the perfect time to do a multitude of things. You can prep your home for the upcoming winter weather ... or for Fall listing and sale. 

But whether you're moving on or staying put, Fall is a great time to declutter and organize your home inside and out ... and your finances too.

I've googled like crazy to find interesting articles filled with Fall info, ideas, tips, and photos. Articles that will help you usher the Fall Season in at your house. I hope you enjoy reading the articles offered below and that they inspire you to make any needed changes.


Paper or Paperless billing? Which serves YOUR needs best?

Paper or Paperless billing?  Which serves YOUR needs best?

These days, companies are under pressure to go "green" and become more environmentally friendly.  As a result, an increasing number of businesses are offering their customers a paperless option with which to receive and pay their bills. 

There are obviously many positives to be found within these paperless services:

Trees are saved  Reduced postage costs  Less paper documentation to organize or save/storePossible rewards for switching to paperlessPayments can often be made/posted same-dayAutomated payments can be set-upMore
But I can tell you from my vantage point as a Chicagoland/IL/WI Mortgage Originator, there are also negatives to be found within paperless methods.  For some of my mortgage clients, the choice of going "paperless" just hasn't worked well.

 For some, an email or text reminder regarding payment of bills has not been enough. They NEED a paper billing to arrive in their mail. 

Their paper bil…