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Up front mortgage insurance on FHA loan?

Up front mortgage insurance financed into an FHA loan is being accrued over 84 months. The loan is refinanced in the same year and up front mortgage insurance is again financed into an FHA loan (same mortgage co.). The loan balance is higher. Can the remaining up front MIP from the first mortgage be accrued, or is it lost?

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  • 7 years ago
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    When you retire an FHA loan early, either by paying it off or refinancing the outstanding balance, any unamortized balance of the Mortgage Insurance Premium is lost. The MIP on the new loan may then be amortized over the shorter of the term of the new loan or 84 months, starting with the closing date of the new loan. See IRS Pub 936 http://www.irs.gov/publications/p936/ar02.html#en_... for further information.

    Note: You won't find this in the Tax Code, but any unearned MIP will be refunded to you by HUD if the loan is retired within about 6 years or so. Make sure that HUD has your current address on file. Normally you will receive this refund automatically a few months after closing. If you don't receive the refund, you can follow up on it here: http://www.hud.gov/offices/hsg/comp/refunds/index.... You'll need your HUD case # from you original loan documents.

  • 7 years ago

    The unearned premium is credited to the new loan. In other words, if you had $500.00 unearned premium on the first loan & your new loan had $2500.00 up front.. you would only pay $2000.00. However, that is going to end this year.. FHA is changing the guidelines.

    Source(s): Mortgage lender 27 years.
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