Just a quick reminder that FHA loans do not have a prepayment penalty. You can payoff the loan early or make periodic payments toward principal reduction without any a negative recourse.
The annual mortgage insurance (paid monthly) is in place for a minimum of 60 monthly payments and then can be removed once the loan-to-value reaches 78%.
Effective with mortgages endorsed for insurance on or after December 8, 2004, the refund schedule for those borrowers who refinance to another FHA-insured mortgage is modified to a three-year time period. A refund for loans not refinancing to another FHA - insured mortgage is eliminated.
Mortgagee Letter 2005-03
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