The fees that FHA charges its borrowers are different depending on the type of refinance loan. The fees for FHA streamline loans used to be significantly less expensive than cash-out or rate-term refinances. With recent changes, that is no longer the case and the fees are often comparable. FHA refinance mortgage programs contain two different kinds of mortgage insurance paid on each loan.
Upfront Mortgage Insurance Fees for FHA Refinance
For cash-out and non-streamline rate-term refinance loans, the Up Front Mortgage Insurance Premium or UFMIP is a fee charged to the borrowers at closing.
For non-streamline refi’s, the UFMIP is figured at 1.75% of the total refinance loan amount and then added to the mortgage balance to be paid over time. For example, if your proposed FHA refinance loan amount is $100,000, the UFMIP would be $1,750, which is added to the mortgage at closing for a total loan of $101,750.
If your new loan is a Streamline Refinance, the up front premium depends on when the original loan was endorsed. If the original loan was endorsed before June 1, 2009, the up front fees are only 0.01% of the total loan amount. If the original loan was endorsed after June 1st, 2009, the upfront premium is much higher at 1.75% of the loan amount.
Up Front Mortgage Insurance Premium (UFMIP)
Rate-Term and Cash-Out Refinance Fees
- 1.75% of the proposed mortgage amount.
FHA Streamline Refinance Fees
- Original loan endorsed before June 1st, 2009 – 0.01% of the proposed mortgage amount (one-thousandth).
- Original loan endorsed after June 1st, 2009 – 1.75% of the proposed mortgage amount.
Annual Mortgage Insurance Fees for FHA Refinance
Annual Mortgage Insurance Premium (MIP)
The second FHA fee for refinance is the Annual Mortgage Insurance Premium or MIP. The Annual Mortgage Insurance Premium is calculated based on several factors including the proposed loan amount, loan-to-value (LTV) and term length.
To determine the annual MIP, the term length, loan-to-value and loan amount are considered. Depending on those factors, the Annual MIP is established as a percentage of the refinance loan amount, which is then divided by 12 and charged monthly. Get help with calculating FHA refinance costs and fees.
FHA Cash-Out and Rate-Term Refinance Annual MIP Rates
30 Year Refinance Under $625,500
- 1.35% Annually – LTV greater than 95%
- 1.30% Annually – LTV less than or equal to 95%
30 Year Refinance Over $625,500
- 1.55% Annually – LTV greater than 95%
- 1.50% Annually – LTV less than or equal to 95%
15 Year Refinance Under $625,500
- 0.70% Annually – LTV less than 90%
- 0.45% Annually – LTV less than or equal to 90%
15 Year Refinance Over $625,500
- 0.95% Annually – LTV greater than 90%
- 0.70% Annually – LTV less than or equal to 90%
- 0.45% Annually – LTV less than or equal to 78%
With interest rates hovering around historic lows, if you are paying more than current rates, now is the time to get serious about refinancing. Do your homework, shop around and consider your options carefully. All lenders are required to provide full disclosure and financial information on their mortgage products, so you can make a fully educated choice on the mortgage that is exactly right for you.
FHA Streamline Refinance Annual MIP Rates
Original FHA Loan endorsed before June 1st, 2009
- 0.55% Annually
30 Year FHA Streamline, original loan endorsed after June 1st, 2009
- 1.35% annually – LTV greater than 95%
- 1.30% annually – LTV less than or equal to 95%
15 Year FHA Streamline, original loan endorsed after June 1st, 2009
- 0.70% annually – LTV greater than 90%
- 0.45% annually – LTV less than or equal to 90%
FHA Annual MIP Cancellation Point
- Yearly MIP collected entire life of loan – LTV greater than 90%
- Yearly MIP cancelled after 11 years – LTV less than or equal to 90%
