It is surprising how many people I speak with who have talked to other loan officers about an FHA streamline refinance who have not gotten all of the information they need to make an educated decision.
On occasion, I run into people who have gotten actual mis-information from a loan officer, but most often, I find that they loan officer just didn’t know – or if they did know, they weren’t telling!
Here are 3 simple questions that you can ask your loan officer about your up-front UFMIP (Up Front Mortgage Insurance Premium) account that will tell you how much they know or don’t know about how FHA loans work – and specifically, how the FHA streamline program works.
Question #1: How much did I pay in UFMIP?
Let’s try a tricky question first. Your loan officer should be able to tell you how much UFMIP you paid based on when you took out your FHA loan. He should also be able to tell you how much money is left in your UFMIP account and how the UFMIP account works. And why FHA charges UFMIP…. sorry, I got a little carried away, and that one question turned into 4 questions that you could ask before I stopped myself.
Question #2: Is everyone required to pay UFMIP?
This is a “gimme” — yes. Everyone who takes out an FHA loan is required to pay UFMIP – no question.
Question #3: What is the difference between UFMIP and MI?
Also pretty easy – UFMIP stands for Up Front Mortgage Insurance Premium and is a one-time fee. MI stands for Mortgage Insurance and is paid each month as part of your monthly payment. MI only goes away once you have paid down your FHA loan to approximately 80% of what you borrowed.
If you ask these questions to a loan officer, they should absolutely, positively know these answers – and it will be a good sign that they can help you with the FHA streamline program.
If they stumble or don’t know?
Have ’em call me.