NLIC.org

Jim Said:

Does Mortgage Insurance Premium (MIP) last for the term of the contranct on a house?

We Answered:

There are 2 forms of mortgage insurance:
1) MI- this is on FHA loans. This is a requirement even if you are borrowing less than 80%. You have to pay this for a minimum of 5 years. If you borrow more than 80% you still have to pay it until you drop to the 80% level but it cannot be less than 5 yrs.

2) PMI- PMI you have to pay if you borrow over 80% of the homes value. This will automatically drop off when you reach the 80% or you can call at 79% and request it to be dropped.

Bill Said:

What is the current upfront mortgage insurance premium? Is it 1.50 or 1.75? Thanks.?

We Answered:

1.75

Dale Said:

Can the Mortgage Insurance Premium be paid by the seller in a FHA loan as part of the closing costs?

We Answered:

The previous answer is incorrect. YES, the seller can pay the up front mortgage insurance. The only restriction is that they must pay the entire amount, it can't be split up between the 2 parties.

Please keep in mind that you do not pay the premium out of your pocket - it's not part of your funds to close. Up front MIP, when paid by the borrower, is actually financed on top of the loan amount and part of the loan proceeds. Having the seller pay for it won't reduce your cash to close, it will only reduce your loan amount by that amount.

Charlene Said:

Can I use the Mortgage Insurance Premium and the Loan Amount to work out the valuation amount of my property?

We Answered:

Please explain this question. I don't know what PMI has to do with the value of your property. That just means you put less than 20% down.