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.