I am purchasing a house with 15% down and I am trying to decide between going FHA or conventional. My FHA case number was pulled back in March, just before the new rules went into effect, so if I go FHA, I'm looking at the 60 month and 78% Loan to value ration before I can take the PMI off.
What I don't understand, is what the 78% LTV is calculated off of.
Is it based off of the appraised value of the house at purchase, to which I already have a 15% stake? If so, I'd reach the 78% mark in just under 5 years if I didn't pay any extra toward principle.
Is it based off the amount I am actually borrowing regardless of how much I put down? In that case, I wouldn't reach the 78% for almost 11 years.