[quote=scaredycat]yes, but of course all of this goes out the window if in fact FHA PMI can be cancelled after a certain number of years. wher eis that FHA guru guy who was chased off the board a while back?
also, of cours,e there has to be some return imputed to the 66K in the fha scenario , since the 80k going into the house is getting a gain imputed to it. it mightbe very low, the bank ate of interest, or itmight be higher.[/quote]
scaredycat –
The google is our friend. I was curious about this so I googled.
It appears that the MIP can be removed from the FHA loan if three conditions are met:
– The loan term is for 15 or more years.
– The MIP has been paid for 5 years.
– The Loan to Value is at least 78%.
If you’re expecting the value of the house to decline – you can’t assume you’ll qualify for the 78% LTV in the 5 years. So if you’re going with FHA for the lower down, out of fear of losing the down payment in a declining market – you should NOT count on the MIP going away since, clearly, you’re assuming a declining market and your LTV will stay high as the value goes down.
(Does that make any sense?)
