Q:

What does FHA MIP mean?

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Quick Answer

"FHA MIP" is a two-part acronym meaning Federal Housing Administration mortgage insurance premiums. FHA loans are a government-backed mortgage alternative for people unable to meet the 20 percent down payment requirements of a conventional loan. The caveat is that the borrower must pay mortgage insurance.

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What does FHA MIP mean?
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Full Answer

The FHA operates under the umbrella of the U.S. Department of Housing and Urban Development. The FHA requires just a 3.5 percent down payment, making it more feasible for many aspiring homeowners. MIP offsets the added risk to lenders that issue the loans. As of 2014, MIP typically includes an up-front payment of 1.75 percent of the loan amount as well as annual premiums.

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