topic Re: Upfront Mortgage Insurance in Mortgage Loans

Upfront Mortgage Insurance

CEJ2022 — Thu, 01 Dec 2022 21:10:38 GMT

I have been looking over my Loan Estimate and the upfront mortgage insurance is included in the closing cost. However my loan amount reflects the upfront mortgage insurance being added, loan amount $294,566 but when I calculate it with the down payment loan amount should be 289,500. So if my Mortgage Insurance is financed will the $5066 be deducted from my final Closing Disclosures?

This isn't urgent or a deal breaker which is why I am asking here instead of reaching out to my Broker/Lender right now. We have a tentative close date of 12/16 so I am just driving myself insane thinking of different scenarios.

Re: Upfront Mortgage Insurance

ShanetheMortgageMan — Thu, 01 Dec 2022 21:23:25 GMT

The down payment amount is 3.5% of the sales price, which would be $10,500 and so your base loan amount will be the $289,500 figure you mentioned. The upfront mortgage insurance premium (UFMIP) can either be completely paid out of pocket or completely financed into the loan (rounded down to the nearest dollar, the remaining cents are added to the funds you bring in at closing). In your situation the 1.75% UFMIP is $5,066.25 so $5,066 can be financed into the loan, bringing the loan amount up to $294,566 and the remaining $.25 is added to your funds to close.

Below is a graphic showing it being financed into the new loan amount:

If it wasn't financed in then it'd look like the below, increasing the amount of funds due at closing from you:

Re: Upfront Mortgage Insurance

CEJ2022 — Thu, 01 Dec 2022 21:36:17 GMT

Thanks for the response. So it appears that the closing cost will be less the $5066 then. I will patiently(not really) wait on the final CD