NLIC.org

Jill Said:

Is the 1.75% Mortgage Insurance Premium (FHA loan) up front payment tax deductible in the tax year its paid?

We Answered:

When did you buy the house? The itemized deduction for the premium is only deductible if you recently bought the house. See 1040 instructions for schedule A.

Since you appear to have paid a lump sum, you must prorate it over the life of the loan.

Also see IRS pub 530.

Julio Said:

What is the purpose of Mortgage Insurance Premium?

We Answered:

MIP is another form of security for the lender. Where lenders have different requirements in this area it will many times be tied to the 'loan to value' of the property. In an example if the bank requires a loan to value of 80% or less, then if you are borrowing more than 80% of the value established by the appraiser they may require mortgage insurance until such time the loan amount goes below the 80% of the value. If you have MIP and you feel that the loan amount is less then the banks requirements then you can ask that the MIP be dropped. The bank will want to confirm this and have the property appraised at your expense. MIP is for the protection of the bank in the case you default on the loan. They will be protected against any financial loses in taking the property back and selling it themselves. This is one reasons short sales have not been a very successful method of liquidating property where the borrower cannot meet his financial agreement with the bank.

Marvin Said:

When you get FHA Loan when do you pay Mortgage Premium Insurance: up front, as monthy payments or both?

We Answered:

Hi, Julka.

FHA 30yr Fixed loans require both an UFMIP (Up Front Mortgage Insurance Premium) of 1.75% and monthly Mortgage Insurance premium of 0.55% if your LTV is over 95%; 0.5% if your LTV is under 95%. FHA 15 yr Fixed loans have the same UFMIP, but if your LTV is over 90%, the monthly MI is 0.25%. If the LTV is below 90%, there is no monthly MI.

The UFMIP can be financed into the loan. Whoever you're getting advice from is not familiar with FHA lending.

I'm a little surprised that you haven't received this answer until now. This is pretty simple stuff straight from the FHA guidebook.

Email me, and I'd be happy to go through this with you and discuss your options. I'm a loan officer with the ability to lend in all 50 states. Conversation and information are both FREE. ;-)

Charles

Catherine Said:

Will my MIP (mortgage insurance premium) increase after a streamline FHA refinance?

We Answered:

It will go up because the MIP premium fees increased during that time. FHA increased mortgage insurance fees from .55% of the loan amount to 1.55% last year.

Keith Said:

Mortgage Refinance - Mortgage Insurance Premium?

We Answered:

You have not given enough information but I can probably reverse engineer it for you.

Your loan amount looks to be around $267,000 and it is an FHA loan you were quoted; if so, the $6,000 as the UFMIP (Up front mortgage insurance premium) is correct.

You are asking 2 different questions. Is it legit? Yes, if the numbers match what I just said.
Is it a good deal, I would say probably not because 5.25% is too high based on current rates for that loan amount and an FHA loan may or may not be your best option.

Get another quote.

Craig Said:

I heard that the "Premium Mortgage Insurance" on my property is tax deductible,how do i get w2 form on it to

We Answered:

It is Private Mortgage Insurance which you may have to have if you finance more than 80% of the price of a home. It will shown on your Form 1098.