Financing in 92691>Question Details

Melanie Fren…, Home Buyer in 92679

Question regarding upfront PMI paid

Asked by Melanie French, 92679 Wed May 1, 2013

Hello. Last year we closed on an FHA loan. At closing, we paid $4800 for the upfront Property Mortgage Insurance as part of closing costs. Then each month, we paid $480 per month on the PMI with our mortgage payment.

14 months later, we are ready to refinance and get out of the FHA loan and drop the PMI by going into a conventional loan. It seems like we're paying one year ahead on PMI. If you've paid a year ahead and there is no need for the PMI, is any money ever returned to us because we have paid in advance?

Thanks for providing your expertise!

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There is no refund of your up front mortgage insurance premium when refinancing from FHA to a conventional mortgage. If you refinanced to another FHA mortgage you would receive 54% of the amount paid at 14 months.

If you can get into a conventional mortgage you should do so despite not getting a refund.
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1 vote Thank Flag Link Wed May 1, 2013
You might want to contact your lender to verify the type of loan you have becauseon and FHA loan you shouldn't have had to pay for PMI upfront and pay for it in your loan. Good Luck
0 votes Thank Flag Link Wed Aug 28, 2013
What on Earth are you talking about?
Flag Wed Aug 28, 2013
I have to agree with @Gregorio...it is distressing to continue to see non licensed people providing financial advice. There is no sense in trying to run down your lender for clarification because the ruling was made by HUD, not your lender.

The FHA program remains a great option for low down payment home purchase; however, due to the current high monthly rates on the FHA MI my advice to consumers is to review a comparison of conventional loans with private mortgage insurance versus an FHA streamline as soon as it is feasibly possible. The savings is usually quite substantial.

Also, there are once again options to do a 75% or 80% first mortgage combined with 15% or 10% second to avoid mortgage insurance all together. It is quite simple for a mortgage professional to provide a thorough comparison of all of your refinance options. Just remember, it is not always just about the rate! Consult with a professional who will provide COMPLETE analysis so you can make beneficial decisions for your specific situation.

Deborah
NMLS #279125
0 votes Thank Flag Link Mon Jul 8, 2013
You should contact the lender that assisted you with getting the loan so hopefully they can give you the information you need when you contact your mortgage company. Have the lender contact the escrow office to pull a copy of your documents prior to you guys meeting if you don't still have a copy of your loan docs you signed. And, congrats on your refi! That's going to be an awesome savings per month!
0 votes Thank Flag Link Mon Jul 1, 2013
Rochelle says:
"You should consult your lender or review your loan documents where it discusses your PMI insurance. That's your best bet! Hope your eligible for a refund!"
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Rochelle,

They don't need to consult their lender, it's a known fact that FHA mortgages originated after December 8, 2004 do not refund the UFMIP unless doing an FHA to FHA refinance.

It would serve you well to stop answering questions that you don't know the answer to and stop sending consumers on wild goose chases when the correct answer has already been given. If you don't know something, leave it for someone who does please.

Thank you.

FYI here it is from HUD:

"For any FHA-insured loans with a closing date prior to January 1, 2001, and endorsed before December 8, 2004, no refund is due the homeowner after the end of the seventh year of insurance. For any FHA-insured loans closed on or after January 1, 2001 and endorsed before December 8, 2004, no refund is due the homeowner after the fifth year of insurance. For FHA-insured loans endorsed on or after December 8, 2004, no refund is due the homeowner unless they refinanced to a new FHA-insured loan, and no refund is due these homeowners after the third year of insurance."
0 votes Thank Flag Link Wed May 1, 2013
Correction...the prorating only applies to streamline FHA to FHA as Gregorio mentionned it.
0 votes Thank Flag Link Wed May 1, 2013
I think that a portion of the insurance that does not get used up get prorated back to you.

With 10 % equity you should be able to refinance and have no "Mortgage Insurance".

Be aware that FHA does not prorate interest on a daily basis. The payoff balance will include interest through the end of the month. Therefore with FHA specifically, it is very beneficial to close your refinance at the end of the month (preferably the last day) to avoid paying interest on both loans at the same time.

Cheers
0 votes Thank Flag Link Wed May 1, 2013
You should consult your lender or review your loan documents where it discusses your PMI insurance. That's your best bet! Hope your eligible for a refund!
Rochelle Chacon
Keller Williams Realty
949 533-1262
0 votes Thank Flag Link Wed May 1, 2013
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