Dropping FHA mortgage insurance: wait it out, or refinance out
Equity and timing
Crossroads answer
Equity comes from paying down the loan and from changes in your home's value. Conventional lenders measure it with a new appraisal, so a rise in value can open the exit sooner than your payment schedule alone. Ask a lender what loan-to-value you would need to avoid PMI and what an appraisal would cost.
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A simple plan
- Estimate your balance from your statement.
- Look at recent nearby sales.
- Ask lenders about loan-to-value limits for no PMI.
- Order an appraisal only when the numbers look close.
MIP questions
Can a higher home value help me drop FHA MIP?
Not on the FHA loan itself, but it can help you qualify for a conventional refinance without PMI.