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FHA MIP Refund Chart & Guide | 2022 Mortgage Insurance Premiums

Homebuyers pay an upfront mortgage insurance premium when they close on an FHA loan. This initial fee, known as ufmip or mip, is equal to 1.75% of the loan amount.

This fee is refundable when you refinance with another FHA loan, such as the FHA Simplified Refinance or FHA Cash-Out Refinance, within three years of closing on your FHA home loan.

Reading: How long does mortgage insurance last on fha loan

Your refundable amount will be reduced each month and you will no longer be eligible for any refund amount after three years.

see if you are eligible for a mip rebate and fha refinance loan today (Oct 27, 2022)

fha 2022 mip refund chart

source: hud 4155.2 7.2.i ufmip bounce removal

why does the fha reimburse mortgage insurance in advance?

The word “refund” can be misleading. the federal housing administration will not send you a check in the mail. Instead, it will allow you to “reuse” part of the initial mip that you already paid for. You can roll over your fha insurance premium only if you’re refinancing into another fha loan, and only if you refinance within three years.

the fha allows these partial refunds because mip has a purpose. This fee helps lenders offer lower interest rates to borrowers with riskier applications. It’s the main reason FHA loans can be a good deal for homebuyers with lower credit scores.

but the benefits of mip in advance increase slowly; Your savings build gradually, with each monthly mortgage payment you make.

If you don’t hold onto your loan long enough to benefit greatly from your lower interest rate, FHA will refund part of the fee so you can repurpose the money on your next FHA loan.

how to calculate your fha mip refund

To calculate your mip amount for your new fha refinance loan, you will need to know the following figures:

  1. Your original mip amount paid. can be found on your original loan documents. your loan officer can help you determine this.
  2. The number of months from the closing date of your loan.
  3. the percentage of your refund (see chart above).
  4. multiply your original starting mip amount by the eligible rebate percentage to determine your total rebate amount.

    For example, if your original mip amount was $2,500 on a loan that closed 10 months ago, then your eligible repayment percentage is 62%. Your mip refund amount is $1,550 ($2,500 x 0.62).

    This refund amount will be applied to the initial mip due on your fha refinance loan.

    how to calculate the mip amount of your new fha loan

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    To calculate your mip amount for your new fha refinance loan, you will need to determine the following figures:

    1. the initial amount of the mortgage insurance premium (ufmip) of your new loan: this is calculated by multiplying the base amount of your loan by 0.0175 (all fha mortgages charge 1.75 percent per ufmip)
    2. the amount of your mip refund (see the previous section to learn how to calculate it)
    3. Next, subtract your mip refund amount from the ufmip amount of your new home loan. this amount is the total ufmip you owe on your new refinance loan.

      For example, if your new refinance loan is $200,000, then your new ufmip amount is $3,500 ($200,000 x 0.0175). now let’s say your mip refund amount is $1,800.

      That means you’ll only have to pay $1,700 ufmip for your new refinance loan ($3,500 – $1,800 = $1,700).

      eligibility requirements for fha mip refunds

      fha has specific eligibility requirements for mip repayments for both your original fha loan and your new fha refinance loan. To be eligible, your current FHA loan must:

      • closed less than three years ago
      • be current on all mortgage payments with no serious delinquencies
      • not have entered into foreclosure
      • not be a mortgage fha assumed
      • other things to consider:

        • must refinance into another fha loan to receive mip refund
        • mip refunds will be applied to the ufmip on the new fha refinance loan
        • for fha streamlined refinances, mip refunds are available after the required 7-month waiting period for these loans
        • closing on your refinance loan must occur by the end of the 36th month after the current fha loan is opened
        • see if you are eligible for an fha refinance loan (October 27, 2022)

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          can i get the fha mip refund in cash?

          fha mip rebates are not eligible as cash rebates. Rather, they are credited directly to UFMIP on your new FHA loan.

          hud’s underwriting guidelines state: “if the borrower is refinancing their current fha loan to another fha loan within 3 years, a refund credit may be applied to reduce the amount of ufmip paid on the refinanced loan” .

          who should i contact if i have questions about my mip refund?

          united states department of housing and urban development (hud) is the administrator of fha loans. hud has created a mortgage insurance premium refund support service center where you can ask questions about mortgage insurance refunds. You can contact hud with questions in one of the following ways:

          • Call 1-800-697-6967
          • send an email to sf_premiums@hud.gov
          • search your database
          • To search this database, you will need your fha case number, which should be part of your original loan documentation.

            advance mortgage insurance premiums vs. annual insurance premiums

            In addition to upfront mortgage insurance premiums of 1.75 percent, all FHA loans charge an annual FHA mortgage insurance premium. each premium charges a different percentage of the base loan amount and has specific requirements.

            These annual premium amounts vary based on your loan term and down payment amount:

            • 30-year loan with less than 5% down: 0.85% annual fee for the entire term of the loan
            • 30-year loan with 5-10% down payment: 0.8% annual fee for the entire term of the loan
            • 30-year loan with a down payment of 10% or more: 0.8% annual fee for 11 years
            • 15-year loan with less than 10% down payment: 0.7% annual fee for the entire term of the loan
            • 15-year loan with a down payment of 10% or more: 0.45% annual fee for 11 years
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              the fha divides these annual fees into 12 monthly installments. Each monthly mortgage payment will include an IPM fee.

              For example, a $200,000 loan with an annual fee of 0.85 percent requires $1,700 in annual insurance fees the first year. To cover this cost, FHA will add about $142 to each monthly payment.

              Please note that all FHA insurance premiums are calculated based on the amount of your loan, which, due to your down payment, must be less than the purchase price of your home. Also, as long as your MIP rate stays the same, the actual amount you owe each year will decrease as you pay off your loan balance over time.

              frequently asked questions about fha mip reimbursement

              how is the fha mip refund calculated?

              The partial refund of your initial mortgage insurance premium is reduced by 2 percentage points each month. after 36 months, you are no longer eligible for a mip refund. scroll up to see a chart of reimbursement amounts by month.

              can you get the money back from an fha loan?

              The Federal Housing Administration insures a cash-out refinance loan. Like all cash-out refinances, this loan works by borrowing against the home equity you’ve built up. If you have enough equity to meet the FHA and your lender’s rules, you can get a cash refund at closing.

              is an initial fha mortgage insurance premium refundable?

              Part of the initial mortgage insurance premium on your fha loan can be rolled over if you refinance into another fha loan within three years. the amount of your fha mip refund is reduced each month.

              how is fha mip calculated?

              fha mip adds 1.75 percent of the loan amount to your loan in advance. This fee may be paid as part of your loan closing costs or may be included in the loan amount. The FHA also charges an annual mortgage insurance premium. For borrowers with 30-year terms who made the 3.5% minimum down payment, the annual mip will be added to 0.85% of the loan amount each year.

              how do i get my fha mip refund?

              Most fha-licensed mortgage lenders will automatically apply your fha mip refund to your new mip amount due. If you’re refinancing your FHA loan into another FHA loan, ask your loan officer to make sure your refund is applied to your new initial MIP.

              can you get the money back from an fha loan?

              If you have enough equity in your home, you can get a cash-out refinance to borrow against your equity. fha-optimized purchase and refinance loans do not allow cash back at closing.

              can fha mip be removed?

              Your fha loan’s annual mip will carry over the life of the loan, unless you make a down payment of more than 10 percent. in that case, the premium disappears after 11 years. You can also refinance into a conventional loan to eliminate mip. Conventional loans won’t require private mortgage insurance (PMI) if you have at least 20 percent home equity. Plus, you’ll need a credit score of at least 620 to refinance an FHA loan.

              apply for an fha refinance before your refund expires

              Current interest rates have curbed demand for refinance loans.

              Meanwhile, home values ​​have continued to rise in many markets, creating more equity for more homeowners.

              if you’re thinking about getting an fha refinance, you may be able to save money through an fha mip rebate.

              see if you are eligible for an fha refinance loan (October 27, 2022)

              See also: 10 Best Robinhood Alternatives to Use in 2022 • Benzinga

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