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Mortgage Insurance (MIP vs PMI)

Mortgage Insurance (MIP vs PMI)

Often times when one is considering the idea of purchasing a home, mortgage insurance is forgotten about when considering their monthly payment.  When this happens, it can become a shock to the borrower.  Mortgage insurance is always important to consider whenever one doesn’t have a minimum 20% down payment.  There are two types of mortgage insurance depending on the loan program.  These two types are Mortgage Insurance Premium (MIP) for FHA loans, and Private Mortgage Insurance (PMI) for conventional loans.  Both of these types protect the lender in the event of a foreclosure by the borrower and allow the borrower to put less money down at the time of purchase on the home.  Let’s discuss these two types further.  Read the rest of this entry