Anna Child- 714-398-6913
PMI is Premium Mortgage Insurance that FHA charges a monthly fee for on a loan they give you with only 3% down of your purchase price. Right now, when you pay your loan down 20% you can have the PMI stopped, thus, saving you that monthly fee. Starting 2013 FHA will not relinquish this charge after you pay 20% down but, will continue to charge it for the life of the loan forcing anyone who wants to get rid of the PMI to refinance. Who knows what interest rates will be at that time?
You can bypass this problem all together by closing your purchase before the fist of next year or wait until you can purchase a home with a conventional loan where you will need to put at least 10% down but more likely 20% of the purchase price.