Insurance
Mortgage Insurance Premium (MIP)
Insurance required on FHA loans that protects the lender if you default. MIP has two parts: an upfront premium of 1.75% of the loan amount (usually rolled into the loan) and an annual premium of 0.55% to 1.05% paid monthly. Unlike PMI on conventional loans, FHA mortgage insurance usually cannot be removed and lasts for the life of the loan if you put less than 10% down.
Why It Matters
Mortgage Insurance Premium (MIP) is part of the safety net that protects your investment in a home. While insurance adds to your monthly costs, going without adequate coverage puts your finances at serious risk.
Review your insurance needs carefully before and after closing. Understanding what mortgage insurance premium (mip) covers and what it does not helps you make smart decisions about the level of protection you need.