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FHA Upfront Mortgage Insurance Premium (UFMIP) - YouTube

Channel: Scott Wynn is Lending a Hand

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hey it's scott wynn here with another no

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and low down payment home loan video for

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you today i

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am covering the topic of up front

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mortgage insurance premium my name is

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scott nguyen i'm a mortgage

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advisor with the win and eagan team at

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citywide home loans

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where we help those that are looking for

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a no and low down payment home loan

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program

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and that's the topic of today's video

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talking about

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fha's upfront mortgage insurance premium

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cfha is actually one of the best no and

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low down home loan programs out there

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requires just a three and a half percent

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minimum down payment and can be combined

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with many down payment assistance

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programs

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uh in many cases if you're looking at

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purchasing a home in colorado

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we would love to help you in navigating

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the different down payment assistance

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programs and in fact there are over 66

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different loan programs down payment

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assistance loan programs

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in the state of colorado that we can

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help you identify which one is best for

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you

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and even if you're looking at purchasing

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in another state this video is relevant

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for you as well

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i've even created past video on finding

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down payment assistance programs where

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you live

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and you can check it out now let's get

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to today's topic of fha's

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upfront mortgage insurance premium so

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the first thing is is how

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much is it well it's 1.75

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of your base loan amount and it can be

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financed into

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the loan or it can be paid for at the

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time of closing

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in full finance or in full at the time

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of closing you can't split it up

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so let's just run through a quick

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example here for you so you can see

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what it is i'm referring to and how the

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calculations work

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now one thing just to be aware of is

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that 99.9 percent of the time

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the upfront mortgage insurance premium

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is financed in let's just say we're

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purchasing a home for three hundred

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thousand dollars

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and the minimum down payment on fha is

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three and a half percent

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so that is ten thousand five hundred

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dollars so we take three hundred

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thousand

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minus ten thousand five hundred which is

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289

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500 that's what we refer to as our base

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loan amount

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to get the upfront mortgage insurance

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premium we simply multiply that by

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one point seven five percent we get five

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thousand sixty six dollars and twenty

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five cents

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we'll simply round that down to the five

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thousand sixty six and we'll add that to

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the two hundred and eighty nine thousand

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five hundred dollar base loan amount

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which results in a two hundred and

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ninety four thousand five hundred

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and sixty six dollar full loan amount

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so that is what would be financed and

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used for

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monthly payment calculations now one

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thing i do want to point out here real

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quick

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uh is that the full loan amount can

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exceed

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the county loan limits in the area that

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you're purchasing in so as long as the

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base loan amount

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the purchase price minus the minimum

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three and a half percent down payment

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does not exceed the loan limit in the

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area that you're purchasing

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the full loan amount can after you

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finance in that upfront mortgage

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insurance premium

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so you might be wondering does it make

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sense to pay that out of pocket

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or um finance it into loan and if you do

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find incident alone how much does that

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impact you in terms of a monthly payment

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so we're gonna go to google real quick

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and run a quick calculation just to show

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you what this looks like

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so if you just do a quick google search

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for mortgage calculator what you end up

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with is this handy little calculator

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here

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uh and what you do is just plug in let's

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say the 5066 we'd be financing

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let's just use a 3.5 interest rate over

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a period of

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30 years what this is showing you is

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that the total payment would be just 23.

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so really what it comes down to is do

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you want to pay

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5066 out of pocket would you rather just

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pay 23

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a month for most people it's a quick and

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easy answer which is i'd rather just pay

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the 23

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a month that's exactly what i would

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choose if i were in your shoes

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looking for a no or low down mortgage

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program since i probably don't have an

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extra 5 000

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sitting around that i can apply towards

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the mortgage so

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the other question that generally comes

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up related to upfront mortgage insurance

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premium is do i ever get any of that

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money back

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and the quick and simple answer normally

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is no however

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there is just one exception that

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exception is is if you're doing an fha

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fha refining so if you've closed

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previously on an fha loan

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had the upfront mortgage insurance

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premium and now you're looking to refi

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that loan into a new

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fha loan then yes you can get a portion

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of that back

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now there's a sliding scale as to how

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much of it you get back depending upon

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how long you've had the fha loan

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the longest amount of time that you'll

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be eligible for any

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sort of refund is just three years if

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you have

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had a mortgage for long fha mortgage for

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longer than three years

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then at that point the upfront mortgage

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insurance premium refund

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goes to zero now let's just run through

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a quick example again let's just say

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you're looking at doing an fha to fha

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refund about a year and a half

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into your loan so that would be year two

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month six and on this chart you can see

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that that would be a 46

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refund so if we look back at the example

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we ran through a moment ago

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and we have uh the upfront mortgage

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insurance premium of five thousand sixty

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six dollars

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then we take the five thousand sixty six

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multiplied by forty six percent and we

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end up at a refund of two thousand three

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hundred and thirty percent

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but there's one big but here the fact is

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is you're doing another fha loan which

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fha loans require upfront mortgage

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insurance premiums

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so you would have to pay a new 1.75

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upfront mortgage insurance premium

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on that new fha uh refi that you're

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doing

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although you will still get that two

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thousand three hundred and thirty dollar

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refund that's credited towards uh the

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loan at the time off

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closing you have a mortgage or home loan

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