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Manny Oloyede | NMLS 1824463

Financing strategy · Refinance

Removing Mortgage Insurance

Mortgage insurance protects the lender, not you, and ending it can meaningfully reduce your payment. On conventional loans it is generally cancellable once you reach the equity thresholds in your loan documents and investor guidelines. On most current FHA loans, the annual premium remains for the life of the loan, so the usual path is refinancing into conventional financing once you qualify.

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Guidance by Manny

Who it is designed for

  • Conventional borrowers whose home value has increased
  • FHA borrowers who now have sufficient equity and credit for conventional financing
  • Homeowners who have paid the balance down substantially

Eligible occupancy types

  • Primary residence
  • Second home
  • Investment property where applicable

Down payment or equity

Not applicable, though bringing funds to reach a target loan to value is sometimes an option.

Major benefits

  • Removes a monthly cost that does not build equity
  • On conventional loans, cancellation may be possible without refinancing
  • Improves monthly cash flow when successful

Important considerations

  • Servicer cancellation requirements, including seasoning and payment history, must be met
  • A value based cancellation request may require an appraisal you pay for
  • Refinancing out of FHA means accepting current market rates and closing costs

How qualification generally works

  • Current loan to value based on an accepted valuation
  • Payment history on the existing loan
  • For a refinance, standard income and credit review

Documents commonly requested

  • Photo ID and Social Security number for each borrower
  • Most recent pay stubs covering a full 30 day period, if you receive W2 wages
  • W2s and/or federal tax returns for the most recent years requested
  • Two months of asset statements for accounts used for down payment and reserves
  • Current mortgage statement, homeowners insurance and property tax information on properties you own
  • Explanations for large or non payroll deposits

Not sure this is the right mortgage?

Tell Manny what you're trying to accomplish. He can help you compare this program with other financing options that may fit your situation — your income and how it is documented, your credit and assets, the property and how you will use it, your timeline, and the guidelines that apply. Most borrowers have more than one workable path.

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Frequently Asked Questions

On most FHA loans originated today, the annual premium remains for the life of the loan. Homeowners typically end it by refinancing into a conventional loan once they have the equity and qualifications to do so.

Review your loan documents and contact your servicer. Cancellation is generally tied to equity thresholds, loan seasoning and payment history, and a value based request usually requires a valuation acceptable to the servicer.

On conventional loans, borrower paid PMI may generally be cancelled once the loan to value reaches the level set by the servicer's rules, and it terminates automatically at a defined point based on the original amortization schedule.

PMI on a conventional loan can typically be cancelled as equity grows. FHA mortgage insurance usually remains for the life of the loan when the down payment was small, so removing it generally requires refinancing to conventional financing.

In many cases yes. Servicers may allow cancellation based on current value after a seasoning period, supported by a new valuation. Their requirements govern.

Usually, if you are requesting cancellation based on current value rather than the original purchase price. It is also required for most refinances.

Only if the total picture improves. Compare the new rate and closing costs against the mortgage insurance you would eliminate, and check whether a servicer cancellation is possible first.

Loan to value is the loan balance divided by the property value. Lower loan to value means lower or no mortgage insurance cost, and it is the primary factor in cancellation.

Related programs and next steps

Refinance

Rate and Term Refinance

Change your rate, your term, or your loan type without taking cash out.

Learn more Core

Conventional Loans

The most widely used financing for primary homes, second homes and rentals.

Learn more Core

FHA Loans

Government insured financing with flexible credit and down payment guidelines.

Learn more

Considering removing mortgage insurance?

We will review your documents, compare the realistic options, and give you a written preapproval you can use with confidence. Nothing on this page is a commitment to lend.

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