MIP (Mortgage Insurance Premium)
Also called: fha mortgage insurance, upfront mip, annual mip
The mortgage insurance charged on an FHA loan: an upfront premium plus an annual premium collected monthly.
MIP protects the FHA insurance fund, not the borrower. The upfront premium is commonly financed into the loan; the annual premium is divided across twelve payments.
MIP and conventional PMI end differently. PMI can generally be removed once the loan reaches the program’s equity threshold; on many FHA loans the annual premium stays for the life of the loan unless the borrower refinances out of FHA entirely.
Related terms
- PMI (Private Mortgage Insurance)Insurance on a conventional loan that protects the lender when the borrower has less than the program’s required equity.
- FHA loanA government-insured mortgage designed to widen access to financing, with lower down payment and credit thresholds than most conventional loans.
- Conventional loanA mortgage not insured or guaranteed by a government program such as FHA, VA, or USDA.
- RefinanceReplacing an existing mortgage with a new one to change the rate, the term, or both.
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