RE: FHA MIP REFUND CALCULATIONS - Bob Hein

FHA Streamline Refinance

RE: FHA MIP REFUND CALCULATIONS

Information provided by:

Bob Hein ? Priority Mortgage Corp., nmls162989

Phone (616)292-6703 Email: bob@, Website:

January 2015: Many of you know that FHA recently announced a huge reduction in the annual MIP from 1.35 to .85 on terms greater than 15yrs. This change and the recent drop in market rates presents an opportunity for many homeowners to refinance and save a good deal of money, where they could not have before. Here are the requirement for a FHA Streamline refinance as required by FHA and/or Priority Mortgage/Polaris Home Funding:

On the date of the FHA Case Number assignment, the borrower must have made at least six payments, at least six full months must have passed since the first payment due date of the refinanced mortgage and at least 210 days must have passed from the closing date of the mortgage being refinanced.

Min score for a Polaris underwritten streamline is 640 (owner occupant) and 660 (non-owner occupant) FHA requires a minimum 5% PITI reduction from the current P&I plus annual MI The maximum mortgage calculation for total loan amount is (current loan with interest thru the end of the

month - MIP refund + new MIP) Borrower must be 0x30 in the last 12 months and no more than 1x60 over the life of the loan Borrower must be on the job for at least the last 3 months with the same employer or you must credit

qualify ( debt ratio) this streamline (Even though the borrower must have made six months it is prudent to check with your AE to ensure you are outside of your recapture period.)

As the maximum mortgage calculation would indicate FHA allows for a partial refund of the up-front MIP the borrower paid when they acquired the current loan. The table below shows the percentage of refund due to the borrower depending on the month they are since the closing of their last loan. When you pull the FHA case number on the new loan and indicate that this is an FHA to FHA refi you will be given the amount of their refund for a funding date within the current month and the next month.

Months After Closing

1 2 3 4 5 6 7 8 9 10 11 12

MIP refund

80% 78% 76% 74% 72% 70% 68% 66% 64% 62% 60% 58%

Months After Closing

13 14 15 16 17 18 19 20 21 22 23 24

MIP refund

56% 54% 52% 50% 48% 46% 44% 42% 40% 38% 36% 34%

Months After Closing

25 26 27 28 29 30 31 32 33 34 35 36

MIP refund

32% 30% 28% 26% 24% 22% 20% 18% 16% 14% 12%

10 %

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