Overview
FHA loans require an Upfront Mortgage Insurance Premium (UFMIP) equal to 1.75% of the base loan amount. While this fee is typically financed into the loan, some borrowers prefer to pay it in cash at closing to reduce their total loan amount and monthly payment. Deal Details allows you to toggle between these options and instantly see how each choice affects the loan structure.
Before You Start
Requirement | Details |
Loan type selected | FHA financing must be chosen for this option to appear |
Base loan details entered | Purchase price, down payment, and interest rate should be set |
Closing date | A target closing date helps calculate accurate figures |
Step-by-Step: Configuring UFMIP Payment Method
1. Select FHA Financing
Navigate to your deal and select FHA as the loan type
Enter your standard settlement fees for the applicable state
Choose an interest rate and set the closing date
2. Locate the UFMIP Payment Option
Setting | Description |
UFMIP Financed | Default option; the 1.75% premium is added to the loan amount |
UFMIP Paid in Cash | Premium is paid at closing; not added to the loan amount |
⚠️ Important: By default, the FHA mortgage insurance upfront is almost always financed. Only select "Paid in Cash" if the borrower has confirmed they want to pay this fee out of pocket at closing.
3. Set UFMIP to Paid in Cash
Find the FHA mortgage insurance upfront setting
Change the option to Paid in Cash
Click Confirm to save your key metrics
4. Review the Scenario Results
Notice the sales price and loan amount now match exactly (no UFMIP rolled in)
The mortgage insurance premium line item will no longer appear in the financed section
The monthly payment will be lower since the loan balance is reduced
Comparing Payment Options
Switching Between Methods
Action | Result |
Change to "Paid in Cash" | Loan amount equals base loan; UFMIP due at closing |
Change to "Financed" | Loan amount increases by 1.75%; UFMIP added to balance |
To switch methods after initial setup:
Click Edit Key Metrics
Toggle the UFMIP setting between Paid in Cash and Financed
Click Save and Apply
Review the updated figures in your scenario
Saving Comparison Scenarios
1. Create a scenario for each option
After configuring UFMIP as financed, click Save as New Scenario
Name it clearly (e.g., "Financed Upfront MIP")
2. Create an alternative scenario
Switch the UFMIP setting to Paid in Cash
Save as a separate scenario (e.g., "UFMIP Paid in Cash")
💡 Tip: Having both scenarios saved makes it easy to show borrowers the side-by-side impact on their monthly payment and total loan amount.
Quick Reference
Select FHA → Enter loan details → Set UFMIP to "Paid in Cash" → Confirm Key Metrics → Review scenario
Tips for Success
Know the dollar impact—On a $295,000 loan, the UFMIP equals approximately $5,158 (1.75%), which can meaningfully affect cash-to-close requirements
Save both scenarios—Let borrowers compare financed vs. cash options side by side to make an informed decision
Check borrower funds—Verify the borrower has sufficient cash reserves before recommending the paid-in-cash option
Explain the trade-off—Paying UFMIP in cash means higher upfront costs but a lower monthly payment and less interest paid over the loan term