Ask Dr. Don By Don Taylor, Ph.D., CFA • Bankrate.com

FHA mortgage insurance refund

Dr. Don,
I just recently refinanced my home from a Federal Housing Administration (FHA) loan to a conventional mortgage. My loan officer told me that I might be able to get a partial refund of the money I paid in mortgage insurance. Is this true?
Michelle Mortgage

Dear Michelle,
It's true. With an FHA loan, the homeowner pays the insurance premium upfront, unlike private mortgage insurance (PMI). If your FHA loan was outstanding for less than seven years, you may be due a partial refund of that insurance premium.

When the loan was repaid, the mortgage company should have sent the U.S. Department of Housing and Urban Development (HUD) an insurance termination request. (HUD is FHA's parent agency.) If you are eligible for a refund, then HUD can either request that the U.S. Treasury send you a check, or it will send you an Application for Premium Refund or Distributive Share Payment.

If it has been more than 45 days since the refinancing, you should confirm that the mortgage company sent HUD the insurance termination request. If the request was sent and you haven't heard anything, you should contact HUD directly.

The contact information below comes from HUD's Web site. HUD also maintains a Web page that allows people to input their name and case number (if available) to see if they are owed a refund.

Internet banking

Dr. Don,
I was just wondering, how reliable and reputable are the online banks? Can they be trusted? I am curious because I opened an account with NetBank, and I have avoided putting much money into the account for fear that it is not safe. If you cannot give me this info, can you tell me where I can find it? Any help you could give would be greatly appreciated.
Thanks,
Doubtful Dave

Dear Dave,
The leap of faith required to use an Internet bank isn't a large one. You have to be confident that the money you deposited to your account is properly credited to the account, earning the interest rate promised by the bank, and will be available to you when you want to withdraw it. You trust your local bank to do this, so why not an Internet bank?

Sending money in the mail by check or electronically by wire transfer has been going on for decades. Getting the deposit verified is a normal part of the deposit process. So just because the bank isn't in your hometown doesn't mean that they can't receive your money and credit your account in a timely and accurate manner.

Capital adequacy, customer service, and deposit insurance (FDIC) are three critical areas to consider when choosing a bank. You can research your bank's Safe & Sound rating on this site.

NetBank has a three star rating. Financial institutions with satisfactory performance will generally receive a rating of 3 or more stars with the majority of banks falling into the 3 to 4 star range.

You've experienced their customer service so you're the best judge of that area, and your deposits are FDIC insured up to the limits of that coverage. But if you're not comfortable with your Internet banking relationship, then find another bank. Worrying about the safety of your savings isn't a very productive way to spend your day.

-- Posted: June 1, 2001