FHA and MIP

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Submitted by moneymaker on September 8, 2011 - 2:33pm

If buying FHA as most are doing now that have a mortgage it will take about 10 years to get to 78% equity assuming no upward valuation in property. FHA says you can drop the MIP in 5 years if you have better than 78% equity based on original appraisal. I wonder if most people realize that if they are in a 30 year and not paying extra that they may be far from 78% in 5 years, in fact it may take an additional 5 years years to get there.

Submitted by briansd1 on September 8, 2011 - 2:35pm.

Most people don't plan 5 years out.

They just look at the monthly payment today.

Submitted by AK on September 8, 2011 - 2:46pm.

So what's their alternative at 90% LTV and higher?

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