Upfront mortgage insurance is just one of the insurance premiums you will pay when you take on a new FHA loan. This insurance gets paid at the beginning of the loan and is a one-time fee; once you pay it at the closing (unless you finance it), you are done; you do not pay it again. This mortgage insurance money goes directly into a reserve account that the FHA holds in order to be able to guarantee FHA loans. If a lender were to come to the FHA and state that a particular borrower defaulted on their loan and now they had to foreclose on it, the FHA is supposed to guarantee the lender those funds, which is why the mortgage insurance premium is charged.

2. is just one of the insurance premiums you will pay
when you take on a new FHA loan. This insurance
gets paid at the beginning of the loan and is a one­
time fee; once you pay it at the closing (unless you
finance it), you are done; you do not pay it again.
Upfront Mortgage Insurance

3. The FHA upfront mortgage insurance that you pay is
different than the annual mortgage insurance you will
pay for the life of the FHA loan. The annual premium
is similar to PMI on a conventional loan – you pay it on
a monthly basis with your mortgage payment.
Annual Mortgage Insurance
Different from

4. FHA Upfront mortgage insurance, as the name
suggests, is strictly paid at the closing. You pay it
before you even take on the loan. You can pay it in
cash at the closing or you can finance it into your loan
without it affecting your loan­to­value ratio.
FHA Upfront Mortgage Insurance
When you Pay

5. There is one circumstance that enables you to get
your UFMIP back. This only occurs when you
refinance your current FHA loan into a streamline FHA
loan. This is typically done when interest rates get
much lower than they were when you took out your
original FHA loan
FHA UFMIP
You can Get
BACK

6. If you paid UFMIP on one FHA loan, you will still be
required to pay it on any subsequent FHA loans that
you receive. This is true even if you refinance into
another FHA loan.
on Every FHA Loan
You Pay UFMIP

7. might seem like an added cost, but it is a convenience
that the FHA provides you with by giving you access to
these loans. Without FHA loans, fewer borrowers
would get approved for a mortgage because they have
more flexible guidelines and competitive rates.
and annual mortgage insurance
FHA upfront mortgage insurance

8. Finding the
Best FHA Lender
BestFHALender is a one­stop shop offering
useful information about FHA loans and
enabling customers to shop for multiple
lenders.
CLICK HERE
TO LEARN MORE

9. Information Provided by
Justin Mchood
He is Americas Mortgage Commentator
and has been providing Mortgage
commentary for over 10 years.

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