MIP - Mortgage Insurance Premium

The definition of mortgage term: Mortgage Insurance Premium

MIP is insurance paid for by the borrower of FHA loans. It is similar to PMI, in that it is a safety measure put into place to protect the lender if the borrower defaults. Borrowers are charged a 1% upfront MIP as well as an annual MIP of around 1.15%. 1/12 of the annual fee is paid each month and deposited into an escrow account for the lender to use when the payment is due.

 

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