When someone wants to get an FHA loan, they are going to have to pay mortgage insurance – both in the form of “up front mortgage insurance” (UFMIP) and monthly mortgage insurance (MI). Both have been required on FHA loans for years – and from time to time, HUD comes out and changes the requirements for both the UFMIP and MI so that they either increase the amount required or decrease it.
Current UFMIP and MIP Amounts
In most of the FHA mortgage insurance program, FHA requires an Upfront Mortgage Insurance Premium in addition to the Annual MIP.
The UFMIP must either be
- Entirely financed into the mortgage, with the mortgage amount rounded down to a whole dollar, or
- Paid entirely in cash and all mortgage amounts must be rounded down to a multiple of $1.00.
The mortgage amount must be rounded down to a multiple of $1.00, regardless of whether the UFMIP is financed or paid in cash. The UFMIP amount when financed and added to the base loan amount may exceed the statutory loan limits. The base mortgage amount must comply with the requirements. The total mortgage amount may exceed this limit by the financed UFMIP amount. Any UFMIP amounts paid in cash are added to the total cash settlement accounts.
The total FHA-insured first mortgage on a property is limited to 100% of the appraised value, and the UFMIP is required to be included within that limit.
In addition to the UFMIP, certain mortgages require the payment of an annual premium. The percentage amount of the annual premium is based upon the LTV and the term of the mortgage. The annual premium is divided into 12 monthly payments that are added to the borrowers monthly mortgage payment.
Purchases, Full-Qualifying Refinances, and FHA Streamline Refinances for case numbers assigned prior to 10/4/10 are as follows:
Purchases, Full-Qualifying Refinances, and
FHA Streamline Refinances for case numbers assigned after to 10/4/10 are as follows:
MIP Refund Rules: Can You Get An MIP Refund?
Some people inquire about the chance of getting an MIP Refund. Mortgages endorsed after December 8, 2004, are no longer eligible for UFMIP refunds except when the borrower refinances to another mortgage to be insured by FHA. The refund schedule for those borrowers who refinance to another FHA mortgage is only applicable if the borrower is refinancing in the first 3 years.