MI, MIP, Fundnig Fee

Parkers_80 · Joined: 09 Feb 2009 Posts: 1 1.42 Dollars($)

I am in the process of refinancing my house. I will be financing 90% of the amount the home appraised at which is $148,500 for 30 years at 4.875 APR. I am concerned at the fee that is listed on my closing quote documents showing that they are charging over $7,000 for MI, MIP, Funding Fee. When I orginally purchased the house I did not pay anything for this fee. I've looked up and understand the MIP, but everything I've seen says that the fee is 1.5% of the amount of the loan which would only be $2,250.
Do you know what other charges could be included on this line for the MI, MIP & Funding Fee?

jameshogg · Posted: Tue Feb 10, 2009 12:21 am Post subject:

Are you refinancing with an FHA loan? Usually, there's an upfront mortgage insurance premium (MIP) which equals 1.5% of the loan amount. There's also a funding fee or lender fee worth 1.5% of the loan amount (if it's 30 year fixed loans) for an FHA mortgage. The best thing is to requst your lender to break down the costs and make them more clear to you.

Thanks

ashleyblanton · Posted: Fri Feb 13, 2009 3:38 pm Post subject:

The upfront cost is actually 1.75% now. So that alone would be 2598.75. And then there is a monthly MI fee. If you want to send me your GFE, i can take a look at it and give you some information about what you have going on. Explaining charges, etc.

gmakerley · Posted: Sat Feb 14, 2009 7:07 am Post subject:

thank you ashley...yes the upfront mi percentage is 1.75%. a "funding fee" (it appears to me) is something quite different from mortgage insurance. in all likelihood, what you've been quoted is what the origination and discount fees are, coded a little differently. why? who knows, but you will be paying these figures if you move forward.

Guest

what is a MI, or MIP fee?

gmakerley · Posted: Wed Jul 01, 2009 7:05 am Post subject:

MI is mortgage insurance. MIP is mortgage insurance premium. there is a slight difference. MI is obtained by a lender on any loan that exceeds 80% loan-to-value ratio, through private companies. it is an insurance that covers the lender in the event of losses, such as in the case of a borrower defaulting on payments. the mortgage insurance company will compensate the lender for its loss.
MIP is the Federal Housing Administration's version of MI - essentially the same premise, but as FHA loans are guaranteed by the federal government, there is no private company involved. MIP consists of an up-front payment (1.75% of the loan amount, usually financed rather than paid in cash) and a monthly payment (.55% of the loan amount) until the loan to value ratio hits the 78% mark, at which point it ceases.

oh yes...private mortgage insurance also ceases once a loan hits an 80% mark, but a borrower needs to provide documentation that the threshold has been reached.

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