Premium Payback

QUESTION:

What would happen to the initial FHA lump-sum mortgage insurance premium I paid at closing if I refinance my FHA mortgage to a conventional loan? Will I get back the money I paid up front?

ANSWER:

Long ago it might have been possible to get a partial refund because the FHA program was regarded as a "mutual" insurance plan, and borrowers were essentially program shareholders. The system changed in 2004, and the ability to get back premium money has generally disappeared.

There is an exception if you refinance one FHA mortgage with a replacement FHA loan. According to HUD: "for FHA-insured loans endorsed on or after Dec. 8, 2004, no refund is due the homeowner unless they refinanced to a new FHA-insured loan, and no refund is due these homeowners after the third year of insurance."

So, yes, it's possible to get a refund but only if you quickly refinance within the FHA program. For specifics, speak with a lender or call HUD at 800.697.6967.

QUESTION:

We're thinking of installing solar power. Does solar help sell homes? What about transferring a contract with a solar company to new owners?

ANSWER:

You can install a solar system or you might elect to have a utility do the installation and then pay a monthly fee. As to transfer rights, that's something to get in writing if you work with a utility.

A 2011 study by the Ernest Orlando Lawrence Berkeley National Laboratory found "strong evidence" that California homes with solar power sold for higher prices than comparable non-solar homes. The typical price difference was about $17,000.

Whether solar will pay off in terms of resale value is a complex question and depends on such issues as location, system efficiency, cost, monthly savings and local market conditions. Already, however, FHA energy-efficient mortgages are available that allow home buyers to borrow more because of expected utility savings - and better mortgage financing always is a plus for sellers.