Established Contributor
JusdoNit
Posts: 921
Registered: ‎12-10-2011
Pay FHA ufmip at closing or finance it?

Question: Is it better to pay FHA upfront mip at closing or have it rolled into my loan?  Does anyone know which would be cheaper? 


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Established Contributor
JusdoNit
Posts: 921
Registered: ‎12-10-2011
Re: Pay FHA ufmip at closing or finance it?

Anyone????


Starting Score: 722
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Established Contributor
JusdoNit
Posts: 921
Registered: ‎12-10-2011
Re: Pay FHA ufmip at closing or finance it?

No one has an idea of how much the potential savings may be of paying the ufmip (fha upfront mortgage insurance premium) out of pocket? vs having it financed into your loan.


Starting Score: 722
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Lel
Posts: 5,268
Registered: ‎03-18-2008
Re: Pay FHA ufmip at closing or finance it?

JusdoNit wrote:

No one has an idea of how much the potential savings may be of paying the ufmip (fha upfront mortgage insurance premium) out of pocket? vs having it financed into your loan.


There's no right answer to this.  The question you should be asking yourself is this: what is the opportunity cost of paying the UFMIP out of pocket versus rolling it into your loan?

 

Let's say your UFMIP is $5000.  If you roll it into your loan, then you're going to be paying interest on that money.  However, you might be a savvy stock market investor and feel certain that you invest the $5000 that you didn't put down to pay the UFMIP and get a better return than the interest that you have to pay.

 

So if you roll the UFMIP into your loan, pay 4% interest on it, but then take the $5000 and get a 6% return on your investment, then you've done well.  However, if the stock market tanks and your returns don't match the interest that you paid, then you would effectively lose money on the deal.

Valued Member
hippychic823
Posts: 117
Registered: ‎01-05-2012
Re: Pay FHA ufmip at closing or finance it?
I was kinda wondering the same thing JustdoNIt...its like if you get it rolled into your loan it saves you a lot of money at the beginning of your loan (money to buy furniture/appliances/get utilities cut on, etc) but then again if you get rolled into your loan, you're gonna be paying interest on it, which costs more money in the long term. So, it really just depends on which option you're more comfortable with or which works best for your situation....
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Walt_K
Posts: 3,065
Registered: ‎11-02-2009
Re: Pay FHA ufmip at closing or finance it?

One thing to keep in mind here is what kind of credits you may have negotiated.  In our case, we had credits that exceeded our costs, so we paid the upfront MIP at closing so that we could take full advantage of the credits we were getting. 


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Established Contributor
JusdoNit
Posts: 921
Registered: ‎12-10-2011
Re: Pay FHA ufmip at closing or finance it?

Ok.  Thanks for everyone's input.


Starting Score: 722
Current Score: Now 687 what the hockey sticks...from a 784 (Aug 12 EX 751 EQ Fico)
Goal Score: 800

If your outGo is more than your INcome than your UpKeep will become your downFALL.

Take the FICO Fitness Challenge