FHA Mortgage Insurance Premium (MIP)
mortgageAlso known as: MIP, FHA MIP, FHA mortgage insurance
Updated · Written and reviewed by Konstantin Iakovlev
Detailed explanation
FHA loans (3.5% minimum down) require MIP for the entire loan life when down payment is below 10% (with 10%+ down, MIP cancels after 11 years). Upfront MIP: 1.75% of loan amount, typically financed (added to mortgage). Annual MIP: 0.55-0.85% of loan balance, paid monthly. On a $300K FHA loan with 3.5% down: ~$5,250 upfront MIP + $137-$213/month annual MIP. Total MIP cost over 30 years: $50K-$80K. Many FHA borrowers refinance to conventional once they reach 20% equity to escape the lifetime MIP.
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