Up-Front Mortgage Insurance - UFMI

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.

BREAKING DOWN '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. Federal Housing Administration ...

    A United States government agency that provides mortgage insurance ...
  2. FHA Loan

    A mortgage issued by federally qualified lenders and insured ...
  3. Mutual Mortgage Insurance Fund

    A fund that insures mortgages made by the Federal Housing Administration ...
  4. Qualified Mortgage Insurance Premium

    Premium paid by homeowners on mortgage insurance for FHA loans ...
  5. Mortgage Insurance

    An insurance policy that protects a mortgage lender or title ...
  6. Private Mortgage Insurance - PMI

    A policy provided by private mortgage insurers to protect lenders ...
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