![]() ![]() Was she sexier? Was she better, somehow? Why did the other woman get the best parts, when she was left with the worst of her. The betrayed wife, after discovering an affair, takes such a hit to her self-esteem, and she questions what it was about the other woman that was so attractive to her husband. Please contact us if you’d like to explore your mortgage options.I don’t know who wrote this, but I thought it was accurate. We offer a full range of financing options, including both FHA and conventional loans. Questions? Bridgepoint Funding has been helping Bay Area home buyers and homeowners for nearly 20 years. Financing it will increase the size of your monthly payments, but only by a modest amount. Despite the “upfront” name, this fee can be rolled into the mortgage and paid over time. In that scenario, you can expect to pay 1.75% of the loan amount. If you use an FHA loan to buy a home in California, an upfront mortgage insurance premium will be applied. But we’re getting into the policy weeds here. HUD Handbook 4000.1 explains that a portion of the upfront mortgage insurance premium can be refunded if the borrower is refinancing an existing FHA-insured home loan into a new one, within three years. But there are some refinancing situations where it can be refunded. In a typical home-buying scenario, where an FHA loan is used, the UFMIP is non-refundable. It’s Non-Refundable in Most Home-Buying Scenarios It equals 1.75% of the amount being borrowed. Whether you’re using a 15-year or a 30-year FHA loan in California, the upfront mortgage insurance premium is the same. The “amortization terms” part of that quote refers to the length of the loan. The handbook goes on to state that the “UFMIP charged for all amortization terms is 175 Basis Points (bps), unless otherwise stated in the applicable Programs and Products or in the MIP chart.” “FHA collects a one-time Upfront Mortgage Insurance Premium (UFMIP) and an annual insurance premium, also referred to as the periodic or monthly MIP, which is collected in monthly installments.” Also known as the “Single Family Housing Policy Handbook,” this 1,000-plus-page guide is the official policy manual for FHA-insured mortgage loans in California and nationwide. 0175 (the decimal form of 1.75%).įor more information on the upfront mortgage insurance premium assigned to FHA loans in California, we can look to HUD Handbook 4000.1. To do the math: Just multiply the loan amount by. So 175 basis points equals 1.75%.)įor example, here’s the FHA upfront insurance premium for various loan sizes: Loan Amount (A basis point is one hundredth of a percent. You might also see the cost expressed as “175 basis points.” They both mean the same thing. In California, the upfront mortgage insurance premium for FHA loans typically equals 1.75% of the loan amount. The major difference between them is that the upfront MIP is a one-time charge, while the annual MIP is a recurring charge that renews each year.īut let’s get back to the upfront premium in particular, the main focus of this article. An annual insurance premium, also referred to as the periodic or monthly MIPĭespite their names, both of these can be rolled into the mortgage loan and paid on a monthly basis.A one-time Upfront Mortgage Insurance Premium (UFMIP).There are actually two types of premiums paid by the borrower: One of the disadvantages is that borrowers who use an FHA loan in California have to pay mortgage insurance premiums. That’s the primary advantage of this program. This program basically shortens the waiting period for home buyers, by allowing them to buy a property with less money down. This feature removes what would otherwise be a substantial roadblock for a lot of borrowers. The FHA loan program allows California home buyers to purchase a house with as little as 3.5% down. But the FHA program (and other low-down-payment financing options) changed all of that. That put homeownership out of reach for the average American. Before this program came along, people typically had to make much larger down payments when buying a house. The FHA loan program has been helping home buyers become homeowners for decades. Here’s an in-depth explanation of FHA upfront mortgage insurance premiums in California, updated for 2021. But they do bring an additional cost into the picture, from a borrower’s standpoint. They’re an important revenue source for the agency. Without mortgage insurance premiums, the FHA loan program as we know it would cease to exist. The Federal Housing Administration (FHA) uses these fees to cover insurance claims from lenders. Despite the “upfront” name, this premium can be financed or rolled into the loan and paid monthly. At a glance: In California, the upfront mortgage insurance premium for FHA loans typically comes out to 1.75% of the loan amount (or 175 basis points).
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