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Time Out
4 days ago
- Entertainment
- Time Out
This powerful photo exhibit shows the turmoil of Coney Island in the 1960s-70s
These days, Coney Island is known for its roller coasters, Mermaid Parade, and Hot Dog Eating Contest, but back in the 1960s and 1970s, it was a very different story. Instead, the Brooklyn neighborhood resembled "a war zone" between 1965–1975 amid ill-conceived government projects, as the Coney Island History Project explained. Now, a new exhibit of street photography from that era examines what life was like back then. Charles Denson grew up in the West End of Coney Island and began photographing his neighborhood as a teenager. His photos are now part of the exhibition "Coney Island Streets: 1965–1975," which you can visit for free all summer at the Coney Island History Project. The fee exhibit shows the effects of discriminatory policies that began back in 1938 when the federal government "redlined" Coney Island. Redlining targeted the area because of prejudice against immigrants, African Americans, and local residents who were predominantly of Jewish, Italian, and Irish ancestry, the Coney Island History Project explains. The flawed policies of the Federal Housing Administration made it nearly impossible for homeowners to obtain mortgages, loans, and insurance. Slumlords, arsonists, greedy developers, and block-busting took advantage of the situation, and quality of life deteriorated as the area became a poverty pocket. "I grew up to the sounds of fire engines and bulldozers as block after block of viable housing went up in flames or was reduced to rubble under the treads of heavy machinery. None of the structures in my photographs has survived," Denson said in a press release. Block after block of viable housing went up in flames or was reduced to rubble. The government's Urban Renewal program called for the demolition of 60 blocks of homes and businesses. Then, government funding for such projects ran out in 1974, leaving the Coney Island community with a debris field of burned out structures and closed businesses. "My photographs show how resilient the neighborhood proved to be as residents survived as best they could with what remained. During this 10-year period I photographed portraits of local residents, family-run businesses, and the dramatic day-to-day changes taking place in Coney Island," Denson added. My photographs show how resilient the neighborhood proved to be. After photographing his neighborhood as a teen, Denson eventually began his career in 1971 as a photographer for New York Magazine. Today, he is an author of several books about Coney Island and served as executive director of the nonprofit Coney Island History Project. See the exhibit for free at the Coney Island History Project exhibition center (3059 West 12th Street, next to the West 12th Street entrance to Deno's Wonder Wheel Park, just a few steps off the Boardwalk). It's open on Saturdays, Sundays and holidays through Labor Day, 1–7pm.
CNBC
20-05-2025
- Business
- CNBC
Longbridge Financial reverse mortgage review 2025
Founded in 2012, online lender Longbridge Financial is the third-largest provider of reverse mortgages in the U.S. As of February 2025, it's approved more than $94 million in loans. Longbridge stands out for its lower rates and robust digital presence, which includes a reverse mortgage calculator and an easy-to-use servicing portal. Longbridge is a particularly good option for high-value homes: The Longbridge Platinum offering a line of credit of up to $4 million. Apply for personalized rates HECM reverse, HECM for purchase, Platinum Mortgage (proprietary loan with larger limits and a low age requirement of over 55) No specific minimum equity listed, but generally 50% Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent online for personalized ratesHECM, HomeSafe Standard jumbo, HomeSafe Second second lien, EquityAvail Terms applyApply for personalized ratesHECM reverse, HECM for purchase, Platinum Mortgage (proprietary loan with larger limits and a low age requirement of over 55) Terms apply A reverse mortgage allows older homeowners to access cash by tapping into their home equity. Typically, the loan and any interest are not due until you move out of the house, stop using it as your primary residence or pass away. If you fail to keep up property taxes, homeowners insurance or household maintenance, however, the loan could come due early. Longbridge offers Home Equity Conversion Mortgages (HECMs) in all 50 states. Longbridge Platinum, a proprietary jumbo reverse mortgage, is available in about half the U.S. A HECM is the most common type of reverse mortgage, insured by the Federal Housing Administration and available to homeowners 62 or older. Borrowers must pay a mortgage insurance premium of 0.50% of the outstanding loan balance annually. Longbridge offers two types of HECM in all 50 states and Washington, D.C.: HECM Reverse Mortgage for homeowners who currently own their home and HECM for Purchase, for those buying a new home. Longbridge Platinum is a proprietary loan available in Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Louisiana, New Mexico, Michigan, Missouri, Nevada, New Jersey, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Texas, Utah, Virginia and Washington state. Because they're not insured by the FHA, Longbridge Platinum loans are available to homeowners as young as 55 without the need for mortgage insurance premiums. In addition, the high loan limit makes it an option for homeowners with high-value homes or condos, who are usually ineligible for HECMs. These are the typical borrower requirements for Longbridge's reverse mortgages: Unlike most lenders, Longbridge only offers reverse mortgages — so its team is particularly knowledgeable on this product. Its website is full of useful information and has an easy-to-use customer portal and application process. Borrowers can call customer service weekdays to speak to a representative in English or Spanish, but Longbridge doesn't have weekend hours. Global credit rating agency DRBS Morningstar gave Longbridge an MOR RVO2, its second-highest rating for reverse mortgages, citing its experienced management team and underwriting staff, comprehensive approval and monitoring practices and "continued investments in technology to enhance efficiencies across the platform," among other factors. In addition, the Better Business Bureau awarded it an A+, its highest grade, based on transparency, truthful advertising, and its response to consumer complaints. Here's how Longbridge compares to two major players in the market. Both Longbridge and Finance of America focus exclusively focus on reverse mortgages and offer comparable products. But while Longbridge lends in every state, Finance of America doesn't offer its services in Alaska, Arizona, Delaware, Iowa, Illinois, Minnesota, Montana, North Dakota, New Jersey, Rhode Island or South Dakota. Apply online for personalized rates HECM, HomeSafe Standard jumbo, HomeSafe Second second lien, EquityAvail 50% Finance of America is the more prolific lender, however, responsible for 22% of reverse mortgage originations in 2024. Landing at No. 3, Longbridge accounted for 12.3% of the market. Mutual of Omaha and Longbridge both have excellent customer service ratings and a solid selection of reverse mortgage options. While reverse mortgages are only a small portion of Mutual of Omaha's overall business, it has a much larger footprint: The biggest reverse mortgage lender in the U.S., it approved 6,149 loans in 2024, accounting for nearly 23% of the market. And Mutual of Omaha offers existing customers up to $1,000 off closing costs. Apply for personalized rates HECM, HECM for purchase Jumbo, HomeSafe, reverse mortgage refinancing, 50% But while Longbridge has a robust online presence, Mutual of Omaha borrowers must work with a loan officer. Longbridge also offers a $500 closing cost discount for military members. A fully digital lender, Longbridge doesn't have any physical locations but you can apply online or over the phone at 855-523-4326. You'll need a photo ID, your Social Security number, the deed to your house, home loan statements, proof of your property tax and homeowners insurance payments and documents related to the home's maintenance. You'll also have to schedule a session with a HUD-approved housing counselor, who will walk you through the reverse mortgage process and help you see if it is the right decision for you. If you continue, you'll need a home appraisal before Longbridge starts the underwriting process, which can take a month or longer to complete before funds are approved. With the convenience of an online lender combined with low rates, great customer service and nationwide availability, Longbridge would be a great fit. If you want to work with your lender in person, however, you should look at other options. In addition, the proprietary Longbridge Platinum mortgage is only available in 24 states, Longbridge is highly rated by both the Better Business Bureau and by DBRS Morningstar. It's the third-largest reverse mortgage lender in the country. There are several risks involved in a reverse mortgage, including the fact that your loan can come due in full if you fail to pay homeowners insurance or property taxes or keep up with home maintenance. In addition, you could end up leaving your heirs with a complex financial situation to unravel. Yes, if you fail to pay homeowners insurance, property taxes or upkeep your home your reverse mortgage and all interest will come due. If you don't pay, you could face foreclosure. At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and Select reviews mortgage products using a variety of criteria, including the types of loans offered, average rates, terms, fees, down payment options, availability, online experience and customer satisfaction. In addition, we incorporate findings from independent sources, including lender scores from the J.D. Power U.S. Mortgage Origination Satisfaction Study and ratings from the Better Business Bureau and DBRS Morningstar.
Yahoo
19-05-2025
- Business
- Yahoo
How to prepare for FHA appraisal requirements
An FHA appraisal assesses your home's market value and condition to determine whether it's both safe to inhabit and a good investment. You'll need to pass the FHA appraisal to receive an FHA loan for the property. Common problems raised by an FHA appraisal include peeling paint, damage to major systems such as HVAC or plumbing and drainage issues. When you buy a home with a loan from the Federal Housing Administration (FHA), the property must undergo an FHA appraisal. In addition to assessing how much the home is worth, like an appraisal for a conventional loan, an FHA appraisal determines whether it meets agency standards for safety and security. An FHA appraisal is a home appraisal in which a certified professional evaluates a home that will be purchased with an FHA loan. The process is designed to determine: The home's market value. Like a lender for a conventional loan, the lender for an FHA loan and the FHA itself want to ensure that they're not lending or guaranteeing more than the home is worth. That the home meets 'minimum property requirements.' This portion of the appraisal is similar to an inspection for a conventional loan. Essentially, an FHA appraiser will assess whether the home meets standards set by the U.S. Department of Housing and Urban Development (HUD) for safety, soundness and security. If the home is new construction, it must meet 'minimum property standards.' Appraisal vs. home inspection An appraisal suggests what a home might be worth based on recently-sold, comparable properties. Inspections help buyers understand whether a home has any major damage or other conditions that might make it unsuitable for purchase. Conventional lenders require an appraisal and highly recommend, but don't require, an inspection. While the required appraisal for an FHA loan also covers some aspects of an inspection, you may also want to get a separate inspection. The FHA appraisal process typically looks like this: Appraiser visits: An FHA-approved, licensed appraiser takes photos of and notes about property's condition, including its interior, exterior and surroundings. Appraiser writes a report: The appraiser compiles their findings into a report, which outlines the features of the property — including any defects — and provides an opinion on its market value. Appraiser makes recommendations: If the appraiser believes the property doesn't meet HUD standards, he or she will indicate the repairs necessary and their approximate cost. If an FHA appraiser can't determine whether a property meets HUD's standards, the mortgage lender may order an additional appraisal. In general, you can expect an FHA appraisal to be completed within a week. During an FHA appraisal, the appraiser will examine both the local market and the property itself. If you intend to use an FHA loan, knowing a little bit about the process can help you know what to look for as you tour properties. To assess the value of a home, an appraiser will research the local residential real estate market and the sale price of comparable properties that have changed hands recently. Appraisers must cite some specific pieces of market research, including: Two comparable homes sales completed within 90 days Three recently closed sales in the same subdivision Two active listings or pending sales The appraiser will also look at the property itself when making an appraisal. HUD's Single Family Housing Policy Handbook details a long list of conditions that will be reviewed as part of the appraisal process. When it comes to the property itself, the appraiser will ensure it meets HUD's standards by reviewing the following: Physical features: Including the foundation, roof, siding, chimneys and drywall. An inspector must also ensure there's no unremediated lead paint. Utility and systems: Such as water, electrical, plumbing and HVAC. Inspectors also review lighting, sewage, appliances and outdoor features, like swimming pools. Environment: Any potential hazards or nuisances around the home, from nearby power lines to an adjacent freeway or airport, or evidence of pests, such as termites. The inspector will also evaluate soil and yard grading. All homes being considered for FHA financing, whether single or multi-family, must meet minimum property requirements or standards. These rules, which ensure buyers purchase a habitable home, cover items such as: Major systems and appliances: The home's heating, electrical and plumbing systems must all be functioning. Roof: The roof must be functional for at least another two years. Access: The property must be accessible by a safe road. The road can be either public or private. Utilities: Gas, electricity, potable water and sewage utilities must all be accessible. Foundation: The foundation must be undamaged, properly graded and have adequate drainage to prevent leaks. Once the FHA appraisal is complete, the mortgage lender will review the report. Possible outcomes include: No issues. In this case, you can move forward with the purchase. Low appraisal. The appraiser believes that the home is worth less than the agreed-upon purchase price, creating what's known as an appraisal gap. The lender won't provide more financing than the home is worth, so if you'd like to move forward with the purchase, you'll have to pay the difference. You may also try to negotiate a lower purchase price or back out of the deal, but in this case, you could lose your deposit if your contract didn't include an appraisal contingency. Repairs required. If the appraiser finds that the home needs significant repairs, you'll have to negotiate with the seller to have them done before going forward with the loan. Your purchase and sale agreement (PSA) will stipulate who pays, but often, the seller is responsible. The lender may accept evidence that the repairs have been completed or require a second appraisal. Major hazards. If the appraiser uncovers a major issue with the home, it may not be eligible for an FHA loan. If there are issues, 'the appraisal will outline exactly what needs to be repaired for the appraisal to be FHA-compliant,' says Ralph DiBugnara, president of Home Qualified, a real estate industry platform. Typically, the repairs must be complete before closing day, though you may still be able to close if you're delaying an outdoor fix until the weather warms up, for example. In this case, a portion of the purchase price may be held in escrow until repairs are finished. If you'd like a longer timeline to make fixes, consider an FHA 203(k) loan, which finances a home purchase and repairs in a single mortgage. Structural alterations, reconstruction, modernization and elimination of health and safety hazards can all be addressed with a 203K loan. Some of the most common repairs required by the FHA include: Peeling paint: Any areas of the home with peeling paint — including the interior, exterior and any additional structures, such as a shed or fencing — must be scraped and repainted. Broken windows: Broken windows and doors must be replaced prior to move-in. Drainage: If necessary, drainage must be reconfigured to direct water away from the house. Infestation: Any mice, insects or other pests impacting the home must be exterminated. Major systems: If any of the home's major systems — such as heating, plumbing or electricity — are damaged, they must be repaired before closing. How much does an FHA appraisal cost? A home appraisal for a single-family home costs between $300 to $600, according to Neighbors Bank. The price depends on the level of demand in your area, how far the appraiser has to travel and the size of the house and lot. The buyer typically pays for the appraisal, and it may be folded into other closing costs. How long is an FHA appraisal valid? An FHA appraisal can be good for as long as six months, especially in a market where home values are fairly stable. In a hotter market, an appraisal might only be valid for a few months. Most mortgages close within 30 or 45 days, well before the appraisal expires. When do I need an FHA appraisal? You need to get an FHA appraisal when using many types of FHA loans, including: FHA purchase FHA 203(k) FHA cash-out refinance FHA Reverse Mortgage (HECM) You can skip the FHA appraisal if you're getting an FHA streamline refinance loan. What defects are overlooked by an FHA appraisal? An FHA home appraisal won't catch every defect, and the report isn't intended to note the results of typical wear and tear, such as a worn or stained carpet. If the problem is mostly aesthetic, and doesn't make the home unsafe, it won't likely show up in an FHA appraisal.
Yahoo
16-05-2025
- Business
- Yahoo
Is a reverse mortgage a good idea?
A reverse mortgage is one option for homeowners looking to borrow from their property's equity. However, unlike other tools for tapping your home equity, these loans are exclusively for seniors (for the most part, eligibility is limited to those age 62 and up). While reverse mortgages can be a handy way to access cash in your twilight years, they also come with some significant risks and aren't right for everyone. Are you thinking about taking out a reverse mortgage on your house? Here's when a reverse mortgage could be a good idea and when you may want to explore alternative options. In this article: Reverse mortgages: How do they work? When is a reverse mortgage a good idea for seniors? When is a reverse mortgage a bad idea? Reverse mortgage warnings and scams Alternatives to reverse mortgages FAQs Reverse mortgages are a type of loan designed for older homeowners. They allow you to borrow from the equity you've built up in your home and turn it into cash, much like a home equity loan or HELOC. As the name suggests, these loans work in 'reverse' compared to traditional mortgages. Instead of you paying the lender each month, the reverse mortgage lender pays you out of your home equity. You can choose to receive these funds as regular monthly payments, an extended line of credit, or a lump sum payment. Either way, you won't need to repay the reverse mortgage until you sell the home, move out permanently, or pass away — in which case, your heirs will need to pay off the outstanding loan balance, usually by selling the property. The most common type of reverse mortgage loan is a home equity conversion mortgage (HECM), which is backed by the Federal Housing Administration (FHA). You must be at least 62 years old to qualify for these mortgage loans. But you can qualify at age 55 with a proprietary reverse mortgage, which is offered by private lenders. Since reverse mortgages don't require monthly mortgage payments, they can be helpful for senior citizens who want to reduce their household costs. They also allow you to age in place rather than moving into a nursing home or assisted living facility. You can do so without dealing with a costly mortgage payment, and they can give you a steady stream of income at a time when you have limited earnings. This can be helpful if you're only relying on Social Security or have minimal retirement savings to pull from. Reverse mortgages require you to have a lot of home equity, though (usually 50%, according to reverse mortgage lender Finance of America), so if you don't have enough built up, it may not be an option. You must also have the funds to keep up with home maintenance, property taxes, and home insurance coverage. If you can't, the lender could foreclose on your property. Finally, if you still have a balance on your original loan, you will need to pay that off or use your reverse mortgage funds to do so at closing. A reverse mortgage can be a helpful financial tool, but only for the right homeowners. As with any financial product, a reverse mortgage has its pros and cons. If you're not sure you'll have the funds to cover your property taxes, homeowners insurance, and home maintenance costs for the long haul, you should explore other options so you don't lose your house to foreclosure. A reverse mortgage isn't a great idea if you don't plan to stay in your home for long. It can deplete your equity quickly — especially if you still have an existing mortgage on your house — and drastically reduce your profits when you eventually sell the home. The same applies if you're looking to leave behind a hefty estate for your heirs: A reverse mortgage could significantly reduce what you're able to bequeath them while also saddling them with the hassle and headache of having to settle your debt. For the most part, reverse mortgages are safe. But there are always scammers out there. If you're considering a reverse mortgage, you should be on the lookout for potential scams and fraud. According to the Consumer Financial Protection Bureau and the Department of Housing and Urban Development's Office of Inspector General, this could look like one of the following scenarios: A friend or family member coercing you to apply for a reverse mortgage Someone using your identity to apply for a reverse mortgage in your name without your knowledge Contractors trying to convince you that a reverse mortgage is the best way to pay for a home renovation — or that a particular renovation is necessary in the first place Someone asking you to sign a power of attorney over to them to access your reverse mortgage funds High-pressure sales tactics from lenders Pushing you to use your reverse mortgage proceeds to purchase annuities or investments If you suspect a potential scam is happening, report it to the Federal Trade Commission, the CFPB, your state's attorney general, or your state's banking regulatory agency. Reverse mortgages aren't the only way you can access money if you need it as you age. If you're looking to tap the equity you have in your home, you can use a home equity loan, home equity line of credit (HELOC), or cash-out refinance. All of these let borrowers turn home equity into cash, but unlike a reverse mortgage, they all require you to make monthly payments at some point. You could also sell your home and downsize to a smaller place to reduce your monthly payment and cash in on some of the equity you've built up in the property. Alternatively, you could rent out some of the extra rooms in your home. This would create extra monthly income you could use to support yourself in retirement. Dig deeper: Reverse mortgage vs. home equity loan vs. HELOC — Which is best? The biggest problem with a reverse mortgage is that it can lead to foreclosure if you don't stay on top of your property taxes, home insurance, and home maintenance. It also depletes your equity quickly and can leave you little to pass down to your heirs. The biggest benefit of a reverse mortgage is that it allows you to turn your home equity into cash and eliminates your monthly housing payments. This can be very helpful in retirement, when you're on a limited income. Yes, you can lose your home with a reverse mortgage. This would happen if you fail to stay current on property taxes, home maintenance, and home insurance. Laura Grace Tarpley edited this article.
Yahoo
03-05-2025
- Business
- Yahoo
How to remove mortgage insurance on an FHA loan
If you got your FHA loan after the year 2000, you may be able to cancel your FHA mortgage insurance. If you got your loan before 2000, you'll continue to pay the premiums in most cases. If your loan doesn't qualify for automatic cancellation, refinancing is the best way to eliminate MIP. Loans insured by the Federal Housing Administration, or FHA loans, require borrowers to pay FHA mortgage insurance premiums (MIP). These are additional fees borrowers pay both up front and over the course of the mortgage term, regardless of the down payment amount. Eliminating these premiums can be challenging, but it's not impossible. Here's how to get rid of FHA mortgage insurance premiums. No matter how large a down payment FHA borrowers make, they're required to pay FHA mortgage insurance premiums. FHA mortgage insurance includes both an upfront premium that's often paid at closing and an annual premium that may have to be paid for the life of the loan. Borrowers who take out a conventional loan only have to pay for private mortgage insurance (PMI) if they put down less than 20 percent on their home. And once a borrower has achieved 20 percent equity in the home, they may cancel PMI. The most important factor determining whether your FHA mortgage insurance premium can be canceled is the date your loan was originated. Here's how eligibility breaks down by loan origination date: If your origination date was between July 1991 and December 2000: You can't cancel your FHA mortgage insurance premiums. You'll need to keep paying them for the life of the loan. If your origination date was between January 2001 and June 3, 2013: Your MIP is typically canceled when you reach a loan-to-value (LTV) ratio of 78 percent. If your origination date was after June 3, 2013 and you made a down payment of at least 10 percent: Your MIP will be canceled after 11 years. For down payments of less than 10 percent, you'll pay MIP for the life of the loan. Learn more: Estimate your monthly mortgage costs There are two primary ways to eliminate mortgage insurance from an FHA loan: If you meet the eligibility requirements to remove MIP from an FHA loan, your mortgage servicer should automatically cancel the premiums once you meet the criteria: a 78 percent LTV ratio or 11 years, depending on the loan. That's assuming you're in good standing with a record of on-time mortgage payments. If you qualify, and your premiums haven't been canceled, contact your servicer. If you don't qualify for automatic removal — or you do, but want to eliminate the MIP sooner — consider refinancing your FHA loan to a conventional loan. With a conventional loan, you may cancel PMI once you've reached 20 percent equity in your home. Depending on how much you've paid on your loan, you may not need to pay PMI at all after refinancing to a conventional. Here are a few key considerations: Interest rates: In general, it makes sense to refinance if you can get a refinance rate that's at least half to three-quarters of a percentage point less than your current rate. Credit score: If you've improved your credit since you took out your original loan, you might qualify for a conventional loan with a better rate. Conventional loans typically require a minimum credit score of at least 620, though the higher your credit score, the more likely you are to qualify. LTV ratio: A LTV ratio is a mortgage balance divided by the value of the property, and it influences your ability to refinance, as well as the need for PMI. So, in addition to how much you've paid on your FHA loan, take stock of the value of your home. Is it worth more today due to rising property values or a major renovation? If so, that'll lower your LTV ratio and improve your chances of qualifying and the terms you're offered. Refinance closing costs: You'll need to pay closing costs to refinance, so do the math: Will the upfront cost of refinancing be worth the savings in the long run? Our mortgage refinance calculator can help you see how long it'd take to break even and then start profiting from the refi. If your loan isn't eligible for MIP cancellation, it's worth contacting your servicer anyway, especially if you're having trouble making payments. Your servicer can help you explore a loan modification or other options. Once mortgage insurance is removed, your monthly mortgage payment will decrease. MIPs range in cost from 0.15 percent to 0.75 percent of your loan principal, depending on how much you borrowed and the loan's term. Most borrowers pay 0.55 percent. It adds up: Even if you pay only a hundred dollars or so a month in MIP, you could put that money toward emergency savings or another financial goal. Or you might put the extra toward the principal on your mortgage. This will help you pay off your loan faster and pay less interest overall. At first glance, getting rid of your MIP seems like a no-brainer. However, if you're considering refinancing just to remove MIP, think it through. You should only refinance to remove MIP if it'll save you money. If you're able to reduce your monthly payments and total interest charges by refinancing — possibly because interest rates have gone down or your credit has improved — then it's a smart move. If you can't get a lower rate by refinancing, you may want to stick with your original loan, even if it includes MIP. Keep in mind that, if you refinance to a conventional loan and your LTV ratio is 80 percent or higher, you'll still have to pay for mortgage insurance — and PMI could be pricier than FHA MIP. Factor this into your calculations. How does FHA mortgage insurance work? FHA loans are insured by the Federal Home Administration — meaning, should the borrower default on the mortgage, the FHA reimburses the lender the outstanding balance. This FHA backing is what encourages lenders to provide financing to borrowers who have lower credit scores, can't manage a 20 percent down payment or who might not otherwise meet the lender's criteria. The FHA mortgage insurance premiums you're charged go towards paying for the FHA's coverage. So, although borrowers pay for it, FHA mortgage insurance actually protects the lenders, covering their risk for issuing the loan. Can I reduce my FHA mortgage insurance premium? Possibly. You might be able to reduce FHA MIP by refinancing to another FHA loan at a lower LTV ratio. The U.S. Department of Housing and Urban Development (HUD), which oversees FHA loans, lowered FHA mortgage insurance premiums in 2023. Can I use a cash-out refinance to remove MIP? It depends on the type of refi. FHA cash-out refis still incur MIP. Conventional ones and VA ones don't, provided you have enough equity built up in the home — generally, 20 percent of its overall value. But you'd have to ensure you'd be able to maintain that amount of equity, even with your cash takeaway.
