UFMIP is short for "upfront mortgage insurance premium." At closing, every FHA borrower has to pay a one-time fee that is 1.75% of the base loan amount. The fee goes to the FHA's insurance fund, which protects lenders in case a borrower can't pay their bills. You can pay for it yourself or add it to the amount you owe on your loan. AmeriSave's FHA loan page can help you see how UFMIP fits into your total costs if you're looking at different loan options.

Yes, UFMIP is included in the closing costs for an FHA loan. To figure it out, take 1.75% of your base loan amount, which is the purchase price minus your down payment. You can either pay it off at the closing table or add it to your loan. Your lender has to show you this cost on your Loan Estimate and Closing Disclosure, so you'll see it long before closing day. You can find a list of all the closing costs you should expect to pay on AmeriSave's website.

If you refinance into another FHA loan within three years of your original closing date, you may be able to get a partial refund credit. The amount of credit goes down every month, so if you refinance sooner, you'll get a bigger credit. The option to get your money back goes away completely after 36 months. HUD doesn't give you a check. The credit goes to the UFMIP on your new FHA loan instead. HUD has a different kind of refund process that you may be able to use if you overpaid or your case was canceled.

Yes, UFMIP is required for all FHA purchase loans and most FHA refinance loans. The interest rate is 1.75% for both purchase loans and standard refinances. The UFMIP for FHA Streamline Refinances is lower, at 0.55%. You can't get out of paying the fee on an FHA loan. If you don't want to pay UFMIP, you'll need to qualify for a different type of loan, like a conventional, VA, or USDA loan. You can use AmeriSave to look at your options.

UFMIP is a one-time fee that you have to pay upfront for an FHA loan. Private mortgage insurance, on the other hand, is a monthly cost for a conventional loan when the down payment is less than 20%. PMI rates depend on your credit score, and you can get rid of them once you have 20% equity. Most of the time, FHA mortgage insurance, which includes both UFMIP and annual MIP, stays in place for the life of the loan. However, if you put down at least 10%, MIP goes away after 11 years. AmeriSave's mortgage insurance guide can help you learn more about these differences.

At different times in the past, FHA mortgage insurance premiums could be deducted from taxes. However, the deduction has expired and been renewed several times. Current IRS rules and your income level will determine if you can deduct UFMIP in a certain tax year. Before you assume you can claim it, you should talk to a tax professional or read the most recent IRS publications. AmeriSave always says that you should talk to a qualified tax professional about your own situation.

You won't get your UFMIP back if you sell your home. You can only get the refund credit if you refinance into another FHA loan within three years. If you sell the house and pay off the FHA loan, you won't get any money back. If you bought a home with an FHA loan and are thinking about selling it soon after, remember that the UFMIP you paid or financed is a sunk cost. If you're thinking about refinancing before selling, AmeriSave's refinance tools can help you look at your options.

If you put down the minimum 3.5% FHA down payment on a $400,000 home, your base loan amount would be $386,000. The UFMIP is 1.75%, which is $6,755. Your total loan balance goes up to $392,755 if you borrow money to pay for it. On top of that, you'll have to pay annual MIP, which is 0.55% of the loan amount per year for most borrowers who put down less than 5%, broken up into monthly payments. Visit AmeriSave's prequalification page and talk to a loan officer about the numbers to get a personalized estimate.