FHA MIP Never goes away?

[Zach Adams]

Hoping to get under contract on a duplex as an owner-occupied property in next couple of days. I'm using FHA so I can put 3.5% down. I thought then when I eventually have 20% of the loan payed, the MIP would be cancelled. My broker said it's a new FHA requirement that the MIP is there for the life of the loan and I'd need to refinance to get rid of it. Not a showstopper as this is probably 8-10 years down the road for a 20% position, but it is a surpise. Any thoughts?

[Dan Schwartz]

That's been the case for some time. Thankfully, the MIP was reduced this year from 155 bps to 105 bps. I never understand the euphoria for FHA that's espoused in the forums. Putting down the extra 1.5% to go conventional will cost more upfront, but be recovered quite quickly through lower carrying costs. Anyone looking at FHA should also look at conventional before signing the dotted line. My two cents.