MIP/PMI Up-Front Fee Refund?

[themark]

Hello, on my initial loan fee chart there is a 1000 dollar Up-Front charge for Mortgage Insurance, and a monthly charge of 100. My realtor said that once I have 20% equity that I could possibly get the Up-Front charge refunded - but everything I see online seems to say before 2004 for FHA.

I plan on having over 20% equity within 6 months of the purchase and would love to have the 1000 dollar Up-Front MIP fee refunded, or at least part of it. My loan is FHA guaranteed 30yr through Wells Fargo in Florida.

Has anyone heard of this - any ideas? Thanks!

(BTW I posted in this form because this refund seems to be related to FHA from what I have seen online)

[Cat Damiano]

themark,


It would really be helpful if you would keep all questions regarding your new FHA loan in one thread, it makes it easier to answer and find.

For an FHA loan it would be MIP (Mortgage Insurance Premium) not PMI (Private Mortgage Insurance) which is on Conventional loans with less than 20 percent down. You would have to pay MIP for 5 years or until the loan amortizes to 78% – whichever is longer.

http://www.hud.gov/offices/adm/hudcl...es/11-10ml.pdf

[themark]

I'm now thinking of doing a 15yr with 10% down, as if I have read correctly the MIP would dissapear after you reach 78% equity via amortization - compared with the 30yr you are stuck with the monthly MIP for 5-years minimum.

Do I have this correct?

I wonder how long it would take to reach 78% equity with 10% down on a 100k 15yr loan at 3.75% via the amortized schedule?

[Cat Damiano]

Just make sure that you are understanding it correctly by asking the broker. They would also be able to help you figure out, through amortization calculations, when and how long it will take to reach the 78 percent floor.

[themark]

I just spoke with them and actually it looks like I will be stuck with the PMI for 5 years even with 10% down but the monthly rate is significantly lower; still will come out to 2000 over 5 years with the monthly rate and 1% up-front... So that is unfortunate but too hard to gather the 20% by the close date unfortunately.

Wish I had planned this better! Its worth $2000 in savings to get the 20% together..

[Cat Damiano]

That is unfortunate about the timing of it all, but you are planning and taking necessary steps to educate yourself about the process before actually signing on the dotted line and that is a good thing.