Get an FHA Mortgage Insurance Refund. Here's How

Most people are not aware that they can get a refund on their FHA loan premium under certain circumstances. While there are certain restrictions to get the refund, many individuals can qualify easily if they meet the deadlines and the qualifications. Anyone who has opened an FHA loan within the last three years and are planning on refinancing their loan into another FHA loan are able to apply for a refund on their initial premium. This premium is often referred to as an MIP premium fee. This is the fee that people can qualify to get in certain instances are can get all or a portion of it back in cash or rolled over into the new loan premium.

How Much Can I Get For A Mortgage Insurance Premium Refund?

A lot of different factors are calculated in order to see how much of a refund a borrower may bet back. Typically, the refund for borrowers is reduced each month following the initial close date on the first loan. The amount of months that pass the closing date will determine how much you will lose out of the original premium amount.

Important Information About Refunds From Mortgage Insurance Premiums

There are many things to think about when it comes to refunds on your insurance premiums when refinancing your FHA loan. If you do get a refund, the amount will typically be rolled over and deducted from your new loan's insurance premium. You have to wait at least seven months to receive a refund on an FHA streamline loan refinance. If you are refinancing a streamline loan, you may or may not qualify for the refund. There is also a deadline to try and get a refund on your premium for refinancing your FHA loan. The deadline is three years from the closing date of your first loan. Additionally, assumed mortgages do not qualify for mortgage insurance premium refunds. Any people who are going through a foreclosure on their home or are seriously delinquent on their mortgage payments will not be able to qualify for a refund even if they are within the three year deadline.

Is Getting A Cash Refund Possible?

In some cases, you may be able to get a cash refund on your insurance premium. Once it has been determined that you are eligible for a refund on your FHA loan's premium and your loan has been refinanced or paid off, the lender will then contact the HUD office to officially end your insurance for the first loan. Afterwards, they may just send you a check or ask for additional information. Whether or not they ask for more information to prove you qualify for the refund, you will be contacted within at least 45 days after your initial loan has been satisfied in full. Once the HUD department agrees to your refund, they will request a check from the treasury department to send to you.

Overview Of How Refunds Work

Typically, when you refinance your FHA loan into a new FHA loan, you can get some of the initial premium back from your first loan and have that amount deducted from your new loan's insurance premium fee. To qualify for this to happen, you need to refinance your loan within three years of closing on the first loan. If it has been more than three years by the time you refinance your FHA loan, you will not be able to get a refund back or rolled over to your new loan.

If you have an FHA loan and are considering refinancing it, you could find that you will qualify for a portion of the upfront insurance premium fee cost refunded to you. Keep in mind that you need to refinance within the three year time frame, however. It doesn't matter whether you paid that fee in cash or transferred a UFMIP from another loan to qualify. Finding out if you are due a full or partial refund is quick and easy and is money that you are entitled to within the qualifications. If you feel you may be entitled to a refund but aren't sure, you could contact the HUD department for more information and to see if you have a refund due to you.

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