How do I get rid of FHA mortgage insurance?

Does FHA mortgage insurance ever go away on its own?

For most FHA loans taken out since June 2013:

• Less than 10% down: the annual mortgage insurance stays for the life of the loan.
• 10% or more down: it drops off after 11 years.

If your FHA loan is older than that, the rules may be different. I can check your loan for you.

How do I remove it?

• Refinance into a conventional loan. This is the most common route. With about 20% equity, a conventional loan has no mortgage insurance at all. With less, you'd have PMI instead, which comes off as you build equity (unlike most FHA insurance).
• Sell the home. The insurance ends when the loan is paid off.
• Pay the loan down to 20% equity and then refinance, if the numbers work.

When is refinancing out of FHA worth it?

Compare what you'd save (the monthly FHA insurance plus any rate difference) with the refinance costs. If you'll break even well before you plan to move, it's usually worth doing. Your credit score matters here: conventional pricing rewards stronger credit, so a score that's improved since you bought can make a big difference.

Example scenario (illustrative)

A homeowner in Riverside bought with FHA and 3.5% down four years ago. Her home's value has climbed, so she now has about 22% equity, and her credit score is up 60 points. Refinancing into a conventional loan drops her FHA mortgage insurance entirely, and the savings pay back her closing costs in under two years.

Our take

FHA is a great way in, but you don't have to keep paying its insurance forever. Once you have real equity, let's check whether a conventional refinance puts that money back in your pocket.