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Articles Tagged With: MIP (Mortgage Insurance Premiums)

FHA Mortgage Insurance

Home Loan Mortgage Insurance Requirements

When it is time to buy a new home, borrowers have important decisions to make about mortgage insurance. Do you know who is required to pay for mortgage insurance and why? There are home loan programs that offer the option of paying 20% down and sidestepping the lender’s mortgage insurance requirements. Other mortgage loans may require borrowers to come up with a larger down payment to take advantage of the option to stop paying mortgage insurance after 11 years.  Some mortgages have no insurance guidelines in this area at all. We examine these programs below. What To Know About Conventional Loan Mortgage Insurance There is no national standard for conventional loan mortgage insurance in terms of lender requirements. Borrowers can expect to pay 20% down on a conventional loan to avoid | more...

 
FHA Loans

Who Needs Homeowner Insurance?

FHA loans, VA mortgages, and similar government-backed home loans don’t force the borrower to select specific types of homeowner insurance to protect your investment but that does not mean it’s not necessary. Mortgage insurance protects the lender. If the borrower defaults on the FHA home loan, mortgage insurance minimizes the loss for the bank. Home insurance, on the other hand, is a tool for the borrower. It protects your investment by insuring your home and its contents depending on the wording of your specific policy.  First And Foremost Paying for both insurance types may make you feel there is protection for all circumstances. But not all types of damage are covered by your insurer. Did you know that flood insurance is completely separate from insurance for water damage? Some borrowers | more...

 
FHA home loans

FHA Mortgage Insurance: What You Need To Know

When you apply for an FHA mortgage, you are required to have mortgage insurance. This comes in the form of an FHA Up-Front Mortgage Insurance Premium which is paid at closing time in cash or financed into the FHA loan amount. You can do one or the other, but you can’t partially finance this premium. That’s the “up front” part. FHA loans require an annual premium paid in monthly installments. This is called a Mortgage Insurance Premium and is not the same as conventional Private Mortgage Insurance.  That is required by conventional lenders for certain mortgages without a 20% down payment or better. Private mortgage insurance is known by the acronym PMI, and some borrowers (even some lenders) use MIP and PMI interchangeably even though they aren’t the same thing. | more...

 
FHA loans

Mortgage Insurance And Homeowner’s Insurance

No matter what kind of home loan you apply for, you will have issues related to mortgage insurance to brush up on. Are you a first-time homebuyer? Do you have experience buying a home? In either case, there are things to remember. Some new to buying a home assume (mistakenly) that some kinds of insurance are universal. Then there are those who confuse mortgage insurance with homeowner’s insurance. This is not an unusual mistake to make, but it can cost you. What do you need to know about insurance issues? The first thing involves who is protected under the insurance plan. Mortgage Insurance Premiums (MIP) If you want to avoid paying for mortgage insurance on a conventional loan, you are generally required to put a whopping 20% down. When it | more...

 
FHA Mortgage Insurance

FHA Mortgage Insurance Refunds

FHA home loans do not, as conventional mortgages often do (based on LTV), require third-party private mortgage insurance, sometimes known as PMI. Instead, FHA mortgages require mortgage insurance premiums paid as part of your monthly mortgage payment. There is an Up-Front Mortgage Insurance Premium (UFMIP) that is due at closing time in cash, which may also be financed in its’ entirety should the borrower wish to do so. Then the Mortgage Insurance Premiums (MIP) are included in the monthly payment. FHA home loan rules address mortgage insurance issues in HUD 4000.1, which states, “Most FHA mortgage insurance programs require the payment of UFMIP, which may be financed into the Mortgage. The UFMIP is not considered when calculating the area-based Nationwide Mortgage Limits and LTV limits.” That means your loan limit | more...

 
FHA Mortgage Insurance

Is There Such A Thing As A Refund For FHA UFMIP Mortgage Insurance?

Is there such a thing as a refund for FHA Up-Front Mortgage Insurance or FHA UFMIP? This mortgage insurance premium is required on FHA loan transactions and must be paid either in cash at closing time or must be financed into the loan amount. FHA loan rules do not allow a borrower to pay a portion and finance a portion of the FHA UFMIP, it must be paid in full using financing or cash. Borrowers have many questions about this FHA mortgage insurance requirement, including whether or not a refund is possible under the right circumstances. FHA forward mortgages require UFMIP as a condition of the loan no matter if the transaction is an FHA One-Time Close construction loan, existing construction purchase, or whether the borrower is buying a manufactured | more...

 
FHA Fixed-Rate Mortgages Versus Adjustable Rate Mortgages

Can I Finance My FHA Loan Up Front Mortgage Insurance Premium?

Can I finance my FHA loan Up Front Mortgage Insurance Premium (UFMIP)? And how does it affect my mortgage loan? These are questions many ask, unsure of whether FHA mortgage loan limits include the UFMIP and how they are allowed to pay. FHA Up Front Mortgage Insurance Premiums May Be Financed FHA loan rules in HUD 4000.1, the FHA loan handbook, state clearly that FHA UFMIP may be financed. It will be included in the final loan amount at closing time. UFMIP Must Be Financed Or Paid In Cash HUD 4000.1 instructs the lender to either collect the Up Front Mortgage Insurance Premium in cash at closing time, or have it included into the loan amount. However, the borrower must pay 100% either way-you cannot finance half the amount and | more...

 
what is mortgage insurance and how does it work?

What Is Mortgage Insurance And How Does It Work?

“What is mortgage insurance?” is a common question for those new to the home loan process. Do you understand how it works? It helps to define the two things referred to by industry professionals as mortgage insurance. There is mortgage insurance which the borrower pays for as a requirement of the FHA loan, then there is the “mortgage insurance” referred to in FHA loan rules which is something else entirely. Note: What we are discussing here is not hazard insurance, which may be a requirement on some, but not all FHA loans. FHA Mortgage Insurance For The Lender The FHA single family home loan handbook, HUD 4000.1, refers to “mortgage insurance” when discussing the FHA’s role in insuring the loan to reduce the risk for the participating lender. On page | more...

 
What Is An FHA Loan Limit?

FHA Home Loans: What You Need To Qualify

Qualifying for an FHA mortgage is a lot like qualifying for any other major line of credit. FHA home loans are open to all financially qualified borrowers; no applicant is turned away by an FHA lender for “earning too much” and no applicant is denied the chance to apply because they don’t fit into a specific category of wage earner. The amount of income you earn only matters as related to your ability to afford the loan. The FHA loan program is not aimed specifically at one type of income group or another. Credit Qualifying For An FHA Loan Qualifying for an FHA loan means having a FICO score acceptable to both the FHA and your lender. FHA FICO score standards start at 580 and above for maximum financing (minus | more...

 
FHA And HUD

FHA MIP Rates For 2017: Revised

The FHA/HUD official site has announced changes to the FHA MIP fee structure for 2017. According to the latest FHA mortgagee letter, “FHA continuously strives to achieve the appropriate balance between meeting the housing needs of the borrowers that FHA’s mortgage insurance programs were created to serve, and also the requirement of minimizing the level of risk to the Mutual Mortgage Insurance Fund undertaken relative to the insurance of those mortgages.” “FHA has determined that the appropriate balance of its statutory operational goals now requires a reduction of the rate of annual MIP charged pursuant to Section 203(c)(2)(B) of the National Housing Act (NHA). As provided in this ML, the total annual MIP charged pursuant to NHA sections 203(c)(2)(B) and (C) for most Title II Single Family forward mortgages has | more...