What is annual MIP in regards to an FHA mortgage?
Annual MIP = annual Mortgage Insurance Premium. The annual MIP is the portion of mortgage insurance that is paid as a monthly payment. This is insurance that insures the lender in the case that you the buyer/borrower default on the loan. This does not insure you…your home owner insurance is what insures the home you are buying. You can multiply the annual MIP factor by your loan, and divide it by 12 to get your rough estimated monthly payment of your annual MIP. Below are the factors that are effective the day I’m writing this post. July 30, 2013.
– If your home loan is less than or equal to $625,500 and your loan compared to the purchase price of your home on purchases is greater than 95%, then your annual MIP factor is 1.35%. On a $100,000 loan for example, that would be $1,350 annually, so dividing that by 12 means your monthly MIP would be $112.50 a month in this example.
– If your home loan is less than or equal to $625,500 and your loan compared to the purchase price on purchases is less than 95%, then your annual MIP factor is 1.3%.
What is Up Front MIP or UPMIP on an FHA Mortgage?
After reading the rest of this post, if you are still interested in more basic FHA guidelines and details.
UPMIP = Up Front Mortgage Insurance Premium. This is the lump sum part of your mortgage insurance that is rolled into the loan when you are buying or refinancing a home with an FHA mortgage.
– For all mortgages regardless of their amortization terms, any mortgage involving an original principal obligation less than or equal to 90 percent loan to value, the annual MIP will be assessed until the end of the mortgage term or for the first 11 years of the mortgage term, whichever occurs first.
– For any mortgage involving an original principal obligation with an loan to value greater than 90 percent, FHA will assess the annual MIP until the end of the mortgage term or for the first 30 years of the term, whichever occurs first.
– Your Up Front Mortgage Insurance factor is 1.75% whether it’s a 15yr fixed or 30yr fixed FHA loan. To come up with a rough estimate of your rolled in up front MIP, multiply this factor by the loan amount. In an example of $100k loan, your UPMIP would be $1,750.
Kelly says
I never really understood what MIP was when I first bought my house years ago..
Rob says
great info! i now I now how to calculate this if it comes up!
Savannah-Lin Dofa says
I am not a house owner unfortunately.. but this is good that I am learning about all this.. thanks!..
Irene S. says
Good information to know when house hunting.
Tina says
Is this only for FHA mortgages?
Brad Lynch says
Tina,
yes, this is only for FHA. VA and Conventional have different types of mortgage insurance, and “funding fees”, but these details are specific only to FHA. If you need more information on a certain type of loan, just let me know ok?
Dov Shapira says
It’s nice to be able to reach at any time.
Thank you
Laurie Hagedorn says
We have always avoided MIP by coming up with the right percentage of down payment. I think it was 20%. Are you saying it is now 10%, Brad?
Deborah says
If there are mortgage insurances on FHA loans, why have there been so many problems when people default on their loans? Doesn’t the insurance make sure that the lender gets their money?
Meli says
Boy, am I glad I don’t have to know all this an can rely on you to explain it!
Robin Foose says
Great information
TERRY says
You know your mortgage stuff. I think we use different terms in Canada
Daniele Holmberg says
Thanks for the info and how to make these types of calculations:)
tomsfoodieblog (@tomsfoodieblog) says
i appreciate this information on mortgages, I didnt know the difference
Robin says
Your articles are so great because sheeeesh, there sure is a lot of info out there about homebuying and mortgages! It’s a little intimidating, but to see that there’s people like you out there who keep up with this stuff day in and day out, it makes it so wonderful that we can just have you to help us through the process 🙂