What is PMI or MIP on you Monthly Payment?

Private Mortgage Insurance or PMI is a type of insurance required for conventional loans when your down payment is less than 20% of the home's purchase price. PMI protects the lender in case you default on the loan. Similarly, if your downpayment is less than 20% for an FHA loan, you will have Mortgage Insurance Premium or MIP. It is the exact same thing as PMI for conventional loans. There is a distinct difference between the two loan products though when it comes to mortgage insurance. For conventional, once you reach 18% equity, you can request the mortgage insurance to be removed by your mortgage servicer, or it’ll automatically be removed once you reach 20% equity. For FHA, even if you hit 18% or 20% equity, the mortgage insurance will stay on the life of the loan unless you meet certain requirements or refinance to a different loan product like conventional.

Mortgage Loan Originator, NMLS# 2506369
Evolution Mortgage LLC, NMLS# 2432729

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