When you pay for mortgage insurance each month, you might wonder whether that coverage follows you to your next loan or transfers to a buyer who assumes your mortgage. The short answer: mortgage insurance is loan-specific, not borrower-portable. Each new loan or purchase typically requires fresh underwriting and a new premium structure.
Private mortgage insurance and refinancing
Private mortgage insurance—the coverage required on most conventional loans above 80 percent loan-to-value—is tied to the original loan. When you refinance, your existing PMI policy terminates and the new lender underwrites a new policy at current rates. If your home has appreciated and your new loan-to-value is 80 percent or below, you may avoid PMI entirely on the refinance. If you're still above that threshold, expect a new monthly premium based on your updated credit profile, loan-to-value, and the insurer's current pricing. There is no credit or carryover from the old policy; you start fresh. These figures are illustrative; rates and products are subject to change and this is not a commitment to lend.
FHA mortgage insurance and assumptions
FHA loans carry both an upfront mortgage insurance premium—typically 1.75 percent of the base loan amount, financed into the balance—and an annual premium paid monthly. When you refinance an FHA loan into a new FHA loan, you pay the full upfront premium again; no portion of the original premium transfers. The annual premium resets according to the new loan's term, balance, and loan-to-value.
FHA loans originated after December 1989 are assumable by a qualified buyer, subject to lender approval. If the assumption is approved, the buyer takes over your existing loan—and your existing monthly mortgage-insurance premium—without paying a new upfront premium. The original upfront charge remains part of the assumed balance. Assumption can be attractive when your note rate is below prevailing market rates, but the buyer must meet current FHA credit and income standards, and the lender must consent.
VA funding fees and assumptions
VA loans charge a one-time funding fee rather than recurring mortgage insurance. That fee—typically 2.15 percent for first-time use with zero down, lower for subsequent use or larger down payments—is financed into the loan and is not refundable or portable. When you refinance into a new VA loan, you pay a new funding fee based on the new loan amount and your usage tier.
VA loans are also assumable. A qualified veteran or, in some cases, a non-veteran buyer may assume your existing VA loan and its terms, including the original funding fee already in the balance. No new funding fee is charged to the assumer, though the lender will verify creditworthiness and income. If a non-veteran assumes your loan, your VA entitlement remains tied to that property until the loan is paid off.
The Alliance take
Mortgage insurance is underwritten per loan, not per borrower. Refinancing or purchasing means new coverage and new cost. Assumption offers a narrow path to preserve existing terms, but it requires lender approval and a creditworthy buyer. Review your loan documents and talk to your servicer about assumption eligibility, and consult your loan officer when planning a refinance to understand how updated loan-to-value and credit will affect any new mortgage-insurance requirement. Start an application to explore your current options.