![]() ![]() Our rates are subject to change at any time without notice. eLEND's Rate Lock Desk is open Monday to Friday between the hours of 10am and 5pm ET, company holidays excluded (the “Lock Desk Hours”). *Interest rates and programs are offered exclusively through eLEND. For more information, please visit Some products may not be available in all states. Trade / Service marks are the property of American Financial Resources, Inc. ![]() The size of the premium is determined by the loan’s exact characteristics, and when the loan was initiated.ĭue to the fact that the FHA has changed its annual MIP requirement multiple times since 2008, the annual mortgage insurance premium for a loan differs from year to year. Please note that Annual MIP is required for all FHA mortgages. Sometimes it is difficult to figure out on the monthly mortgage statement, due to the fact that the FHA MIP is a line-item, and often listed as “HUD Escrow,” “Risk-Based HUD,” or “Monthly Mortgage Insurance.” Most borrowers assume that it will be designated as “FHA mortgage insurance.” As opposed to the Upfront option, its amount is included in the borrower’s monthly mortgage payment. This insurance program or Annual MIP, is spaced out over 12 installments per year. There is another type of Federal Housing Administration mortgage insurance, which is the FHA’s annual Mortgage Insurance Premium (MIP). Borrowers who are delinquent in their monthly mortgage payments or who have entered into the foreclosure process are ineligible.In order to obtain an MIP refund, the borrower must refinance the existing loan into another FHA loan.Borrowers who are assuming mortgages are not eligible for an MIP refund.These types of mortgage insurance refunds are obtainable for FHA loans that were initiated less than 3 years ago.Although some FHA streamline refinancing options may not qualify for reduced upfront mortgage insurance premiums, there are still MIP refunds that are available.The MIP refunds are accessible for an FHA streamline refinance after the 7-month waiting period is complete.Refunds that are obtained on an FHA to FHA refinance are applied to the upfront mortgage insurance premium.According to Dan Green of The Mortgage Reports, “The refund is based on your original Upfront MIP payment, and decreases by 2 percentage points annually until no money remains to be refunded.” Here are a Few More Good Things to Know About FHA MIP Refunds: Should a borrower choose to refinance their FHA mortgage within the first 36 months following the closing date, they are entitled to a refund on the unused portion of the MIP. However, it does not affect the loan’s LTV or loan-to-value calculation. Ione time only and goes directly into the Mutual Mortgage Insurance fund. The premium or UFMIP, was labeled accordingly, since it is paid “upfront” by home buyers at closing. An example of this is that a loan total of $300,000 would result in an UFMIP of actually $305,250, because 1.75 percent of 300,000 is 5,250. This premium is not paid as cash, but instead added on to the total amount of the home loan. The FHA’s latest UFMIP is around 1.75 percent of the loan size. This premium is referred to as the, “upfront mortgage insurance premium” or UFMIP. They are attractive for a number of reasons, including, the option of making a lower than usual down payment, affordable closing costs, programs for energy efficiency improvements, tax credits, debt consolidation and refinancing.īorrowers who take out FHA loans must pay a mortgage insurance premium at closing. It’s important to discuss your loan options with a trusted financial advisor.Īfter using the FHA Mortgage Insurance Calculator, consult one of our licensed refinance specialists to understand all the factors that may affect the insurance calculation and options available for meeting your homeownership needs.You’ve probably heard the terms, “FHA loan” or “FHA Refinance.” These types of mortgages are guaranteed by the Federal Housing Administration and provided by an FHA approved lender. In addition, if you are a Veteran, there are exclusive loan and refinance options available to you from the Office of Veterans Affairs. In some cases, a conventional loan with PMI for those able to afford a 20% down payment may be less expensive than an FHA Loan – from 0.3% to 1.15% of the loan, with no up-front fee. However, PMI can be canceled when you have reached 20% equity – or paid off a total of 20% of the value of your home. Also, you can expect to pay the monthly insurance premium for an FHA loan for the life of the loan. ![]() For one, FHA insurance tends to cost more than private mortgage insurance for a non-FHA loan. The FHA monthly mortgage insurance differs from PMI in some critical ways. This is for all other loans that are not backed by the FHA. You may have heard the term “PMI” or private mortgage insurance. ![]()
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