Up-Front Mortgage Insurance - UFMI

AAA

DEFINITION of 'Up-Front Mortgage Insurance - UFMI'

An insurance premium that is collected, typically on Federal Housing Administration (FHA) loans, at the time the loan is initially made. It is in contrast to private mortgage insurance (PMI), which is collected by the lender each month when a buyer's down payment is less than 20% of the purchase price. Up-front mortgage premiums are added to a pool of money that is used to help entities, such as the FHA, insure loans for certain borrowers.

INVESTOPEDIA EXPLAINS 'Up-Front Mortgage Insurance - UFMI'

Many people do not realize that up-front mortgage premiums are typically refundable, on a pro-rated basis, if a home is sold within the first five to seven years of ownership. In other words, if someone has paid this premium up front and then sold their home within a few years of their original purchase, they may be entitled to a substantial refund even years after the fact. To find out if you might be eligible, call the FHA at 1-800-697-6967.

RELATED TERMS
  1. Private Mortgage Insurance - PMI

    A policy provided by private mortgage insurers to protect lenders ...
  2. Mutual Mortgage Insurance Fund

    A fund that insures mortgages made by the Federal Housing Administration ...
  3. Self-Build Insurance

    An insurance policy that provides coverage during the construction ...
  4. Half-Life

    A date some time in the future when half of the total principal ...
  5. Closing

    The end of a trading session. The closing of a trading day halts ...
  6. Down Payment

    A type of payment made in cash during the onset of the purchase ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Insurance

    Insurance Tips For Homeowners

    Use these simple ideas to save money and get better coverage for your house.
  2. Home & Auto

    4 Overlooked Homeownership Costs

    Mortgage payments aren't the only expense. Find what else you'll be on the hook for.
  3. Credit & Loans

    Mortgage Points: What's The Point?

    Learn how to pay less for your home in the long run, or save in the short run.
  4. Personal Finance

    Understanding Your Mortgage

    We walk through the steps needed to secure the best loan to finance the purchase of your home.
  5. Home & Auto

    6 Reasons To Avoid Private Mortgage Insurance

    This costly coverage protects your mortgage lender - not you.
  6. Home & Auto

    How To Outsmart Private Mortgage Insurance

    It's possible to use a second mortgage to avoid this fee, but is it in your best interest?
  7. Credit & Loans

    Understanding The Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.
  8. Credit & Loans

    Reverse Mortgages: How To Find A Good One

    Finding a reverse mortgage generally means using a lender that specializes in them. Here's how to find a reputable one.
  9. Stock Analysis

    How Are Interest Rates Affecting Annaly Cap Mgmt?

    Annaly Capital Management reported a net loss of $658 million thanks to the mortgage REIT's strategy of hedging its exposure to higher interest rates.
  10. Savings

    Mortgage Faceoff: Bank of America Vs. Wells Fargo

    Which bank offers the better mortgage deal? Here's how they compare on two popular types of mortgage.

You May Also Like

Hot Definitions
  1. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  2. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  3. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  4. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  5. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  6. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
Trading Center