Refinancing From FHA to VA to Drop MIP

FHA MIP runs 0.55% of the loan annually — $180/month on a $400K loan. VA has no monthly MI. That's pure savings.

This is a full VA cash-out or rate-and-term refinance (not an IRRRL, since the current loan isn't VA).

Closing costs on a VA refi from FHA typically run 2.5–3.5% of the new loan. Break-even is often 18–28 months on the MIP savings alone.

If rates are also lower than your FHA rate, break-even collapses further.

FHA mortgage insurance termination depends on your loan. For many FHA loans with case numbers assigned on or after June 3, 2013, annual MIP generally lasts 11 years when the original loan-to-value was 90% or less, and for the mortgage term when original LTV exceeded 90%, subject to loan term and current HUD rules. Older FHA loans follow different rules. Check your case-assignment date and your actual FHA documents, and verify current HUD guidance before assuming MIP will fall off.

If you plan to sell soon, compare the cost of refinancing against the time you expect to hold the loan.