Finance
In New York, a borrower who has an FHA loan and has paid down their mortgage to 78% LTV (based on original appraised value) is entitled to:
AAn automatic reduction in their interest rate
BAutomatic cancellation of the annual MIP (for loans originated after June 2013 with terms over 15 years, only if the loan term was at least 11 years, otherwise MIP is for the life of the loan)✓ Correct
CAn immediate refund of all MIP previously paid
DConversion to a conventional loan
Explanation
FHA mortgage insurance premium (MIP) cancellation rules changed in 2013. For FHA loans originated after June 3, 2013, with original LTV above 90%, MIP is required for the life of the loan. For loans with original LTV of 90% or less, MIP may be cancelled after 11 years. This contrasts with conventional PMI, which cancels at 80% LTV under the Homeowners Protection Act.
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