For FHA loans greater than 90% LTV, how long does MIP stay on?

For FHA loans greater than 90% LTV, how long does MIP stay on?

• A. Lifetime
• B. 11 Years
• C. 5 Years
• D. 1 Year

Answer: (A)

Mortgage insurance on FHA loans is tied to how much you put down. If the down payment is less than 10% (that is, the loan-to-value is greater than 90%), the annual MIP is required for the life of the loan. In other words, there’s no automatic cancellation after a set number of years for this high-LTV scenario; the MIP remains as long as you have the loan unless you refinance into a non-FHA loan or pay the loan off. This contrasts with cases where a larger down payment might allow for cancellation after a set period, but for LTV over 90%, the insurance stays for the life of the loan.

Mortgage insurance on FHA loans is tied to how much you put down. If the down payment is less than 10% (that is, the loan-to-value is greater than 90%), the annual MIP is required for the life of the loan. In other words, there’s no automatic cancellation after a set number of years for this high-LTV scenario; the MIP remains as long as you have the loan unless you refinance into a non-FHA loan or pay the loan off. This contrasts with cases where a larger down payment might allow for cancellation after a set period, but for LTV over 90%, the insurance stays for the life of the loan.