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Are You Due an MIP Refund from HUD? Free and Easy to Find Out!
Have you had an FHA loan in the past and wondering if you are due a MIP refund? It is now easy and free to find out. Go here and search by your last name and find out if you are owed money from HUD. If you are owed money, it is easy to claim it –
Special note — if someone has asked you for $ in exchange for showing you how to get your refund — see what HUD says on their website about this:
“Beware of “tracers” who offer to help you collect your refund for a fee. Although this practice is not illegal, you can get your refund directly from HUD for free.”
You also can see the Frequently Asked Questions that people ask regarding their MIP refunds here.
If you have more questions about your MIP refund or whether or not you are due an MIP refund — call or email me anytime.
One more time — the link to HUD’s website where you can search for your MIP refund for free is here.
Common Questions and Easy Answers About Reverse Mortgages
I was poking around on the Internet the other night and came across a site about reverse mortgages that was aimed at collecting information from seniors so that one of their sales people could call them and end up trying to sell them a reverse mortgage.
The interesting thing about this site is that their “hook” was “get your free booklet if you give us your information”. They even let you “preview” the booklet by showing you the first 2 or 3 pages of it.
I almost thought about filling out my information so I could actually see the rest of the booklet — and then it dawned on me… I bet I could find these for free!
Enter NRMLA — the National Reverse Mortgage Lending Association (yes, my company is a member).
On the NRMLA site, there is quite a bit of information for both people in the industry as well as consumers — and in about 30 seconds, I found the booklets. The booklets do a nice job of answering some of the most common questions about reverse mortgages — such as:
- What is a Reverse Mortgage?
- Who can get a Reverse Mortgage?
- How can I receive my money?
- Are there restrictions on what I can do with the money?
- How much money can I get?
- Where can I find a Reverse Mortgage lender?
- What kind of Reverse Mortgage products are available?
- How much does a Reverse Mortgage cost?
To see all of the free booklets available from the NRMLA, here is the link!
What is “LPMI”?
LPMI stands for Lender Paid Mortgage Insurance and is sometimes used for conventional, conforming loans.
Before we cover LPMI, let’s recap three different types of loans and the general mortgage insurance rules with them –
Mortgage Insurance For FHA Loans
All FHA loans require that you pay an up-front mortgage insurance premium (UFMIP) regardless of the term of the loan. Recently, FHA changed the UFMIP % requirements in an attempt to match the risk of the loan with the UFMIP requirements. Higher risk = higher UFMIP.
If you have a 30 year FHA loan, you must have monthly mortgage insurance until you actually pay down the balance of your loan to 78% loan-to-value. For mortgage insurance requirements, FHA doesn’t allow you to factor in home appreciation to arrive at a 78% loan-to-value — you must have paid down the balance of the loan in order to waive mortgage insurance.
If you have an FHA 15 year (or less) loan, and your loan-to-value is less than 90%, this is the only time that FHA allows for the home appreciation to be factored in when calculating loan-to-value % and mortgage insurance requirements.
Mortgage Insurance For VA Loans
VA loans NEVER have monthly mortgage insurance — so that is easy to cover.
Mortgage Insurance For Conventional Loans
Regular, conventional loans require mortgage insurance on first liens with a loan to value of 80.01% of greater. Another way of saying this is when the borrower puts less then 20% down, mortgage insurance is required.
Mortgage Insurance rates are calculated based on a complicated combination of credit scores, required lender coverage, loan to value, and type of program. In order to drop mortgage insurance with a conventional loan, you must petition the lender and often they will ask you to pay for a current market appraisal to prove the 20% or greater equity in the property. Also, you must not have had any mortgage late payments.
What Is LPMI?
With a conventional loan, it is possible for the lender to pay the mortgage insurance on your loan — in exchange for a slightly higher interest rate on the loan. Is it wise to pick a loan where the lender pays the mortgage insurance in exchange for a higher rate?
It depends.
It is possible that the higher interest rate using LPMI will save you money on a monthly basis than a lower interest rate with regular mortgage insurance.
It is also possible that the higher interest rate using LPMI will cost you more money on a monthly basis than a lower interest rate with regular mortgage insurance.
The first question I generally ask if someone is interested in possibly using an LPMI program is “how long do you plan to stay in the loan?” The second question is ask is “how long do you plan to stay in the home?” If the answer to either of these questions is more than 5 years, I tell them that it probably wouldn’t make sense in their case.
Generally speaking — if you plan to be in a loan for a shorter period of time, LPMI can make sense.
Over the last year or so, many lenders have dropped their LPMI programs, so it is much harder today to find a lender who even offers LPMI programs — and the few that do are requiring higher credit scores than they used to in order to qualify for the program.
For some people, LPMI programs may make sense. If you seem to refinance every couple of years or plan to refinance again in a shorter period of time — LPMI may make sense for you. If you plan on staying in a loan for a longer period of time (think 5 years +), then make sure that you do the math and don’t get caught spending thousands of extra dollars for not looking ahead.
All About Credit Scores (Part 3 of 3)
In our final installment of All About Credit Scores, I thought I would compile some of the Frequently Asked Questions that I have heard in the recent past (that I could remember at least!).
“Will paying off a collection account remove it from my credit report?”
No. A paid collection account will remain on your credit report for seven years.
If I have a collection, should I pay off the collection agency or the original creditor?
Always pay the collection agency that is collecting for the original creditor. Many times the original creditor will have sold your account to the collection agency.
How can I get accounts removed from my credit report that were awarded to my ex-spouse in the divorce decree?
A divorce decree does not supersede an original contract with a creditor. You must contact each creditor individually and seek the legal binding release of your obligation.
I have no credit and I can’t get a finance company or credit card company to approve me — how can I start to establish credit?
One of the easiest ways to get credit if you have no credit is to apply for a credit card. If you are turned down by a regular credit card, you can apply for a secured credit card.
How can I get inquiries removed from my credit report that I did not authorize?
You will need to contact the bureaus directly to dispute these inquiries.
Why do Experian, Equifax and Trans Union sometimes have different information?
Creditors voluntarily provide information to the credit bureaus and are not required to report to all three. Some companies do not report to the bureaus at all, so it just depends on your creditors.
Do you have more questions about your credit report, credit scoring or anything else credit-related? Let us know!
All About Credit Scores (Part 2 of 3)
In part 1 of our All About Credit Scores series, we covered a few simple ways to tip the scales in your favor when trying to maintain a good/great credit score. Today we are going to cover the “secrets” behind credit score calculations.
Until recently, the secrets of credit score calculation have been very closely guarded — but we can now pretty closely estimate how your score is put together.
Payment History = 35%
Do you pay your credit on time?
Length of positive credit history
Severity and quantity of delinquencies
Amount Owed = 30%
Quantity of credit accounts — too many credit cards with balances can lower a score.
Length of Credit History = 15%
The longer the history, the better.
How long have your credit accounts been established?
How long has it been since you used certain accounts?
New Credit = 10%
Research shows that opening several credit accounts in a short period of time does not represent greater risk — especially for people who do not have a long established credit history.
Types of Credit In Use = 10%
2 installment loans
3 revolving accounts with balances
Balances on revolving debt below 30% of the high credit
No collection accounts
No public records
No foreclosures
No late payments
While the most important thing in credit scores is your overall score — what makes up that score is helpful to know. For example, if you know that too many credit cards with balances can hurt your score — you may want to take steps to consolidate those cards into one account or pay them off if possible.
Many times, your mortgage professional will have access to something called a “what-if” simulator — which will allow them to easily explore how different actions may impact your credit score. The simulator will allow you to experiment with actions — individually or simultaneously — from making payments to closing accounts, transferring balances and more. It is helpful to predict results and to make informed decisions about what actions on your part could easily increase your credit score.
So if you haven’t heard of the “what-if” simulator and are working on refinancing or buying a home, make sure you bring it up with your loan officer — a boost in credit score could save you thousands of dollars in interest over the life of your loan!
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Arizona Mortgage Newsletter
