Why does FHA have 2 mortgage insurance premiums?

An FHA mortgage insurance premium (MIP) is an additional fee you pay to protect the lender’s financial interests in case you default on your FHA loan.

FHA borrowers are required to pay two mortgage insurance premiums: one upfront at closing, and another monthly.

Upfront Mortgage Insurance is 1.75% of the loan amount and Monthly Mortgage Insurance is factored at .55% of the loan amount.

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