Can I avoid?

Do you know approx what your credit scores are? It may be better to refi to conventional to avoid the UMIP and do lender paid monthly PMI if above 80% LTV. I can run several options if you like so we can compare and see which may save the most. Email me at jason@areahomelending.com and I'll be happy to get some basic info and see if i can help.

You have several options here. You did not state what the current value of your home is, or your current interest rate. FHA requires UFMIP and MIP on all loans, with very few expections. If you need to use the original appraisal value because your balance is greater that what your home is currently worth, then an FHA streamline is probably the way to go. FHA requires a 5% improvement to the monthly housing payment as an additional qualifier. If you have the equity, then there are also options out there with PMI, which may be less costly. Be aware that if you do not have 20% equity, some form of MI will be required. The question is how is it paid. Lender paid MI is actually paid for by the lender, but the lender gets the money to pay for it by charging you a higher rate than you might otherwise be eligible for. Make sure you have your Mortgage Banker or Mortgage Broker show you both scenarios so you can make a smart decision.

if your using an FHA streamline refinance, you cannot avoid UMIP or MIP... If you refinance without FHA and you have 20% equity based on a new appraisal with today's value, you can eliminate both, but you would have to pay a slightly higher rate. WilliamAcres.com