MIP (Mortgage Insurance Premium) - FHA Loans Only. The total amount of the Upfront Mortgage Insurance premium.
FF (Funding Fees) - MIP applies to FHA loans and is the amount of the upfront mortgage insurance premium (UFMIP) being financed in with the base loan amount. FF applies to VA loans and is the amount of the VA Funding Fee being financed in the loan amount.
PMI (Private Mortgage Insurance) - Insurance payable to a lender or trustee for a pool of securities that may be required when taking out a mortgage loan. It is insurance to offset losses in the case where a mortgagor is not able to repay the loan and the lender is not able to recover its costs after foreclosure and sale of the mortgaged property.
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Private Mortgage Insurance
PMI is insurance that in case you default on the loan your lender is insured against loss. The borrower pays the PMI/MIP/MMI in the monthly payment.
With a conventional loan when the buyer obtains 20% equity he can apply to have the PMI to be lifted. FHA will not allow mortgage insurance to be lifted during the life of the loan. That is the biggest disadvantage of FHA loans. Most people end up refinancing a FHA loan into a conventional loan after they get more that 20% equity.
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MIP will be removed from an FHA loan when the LTV reaches 78% (based on original sale price) or 5 years passes, whichever happens last.
FF is VA funding fee which is tacked on top of loan amount & financed unless you want to pay up front. There is no monthly mortgage insurance payment on a VA loan.
MIP is on an FHA loan & the Upfront MIP is financed also, but there is a monthly payment also. If you get a 15 year loan & put 10% down, there is no monthly payment, upfront only.
What is MIP/PMI/FF on a good faith estimate?
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