FHA Mortgage Insurance, also known as MIP or Mortgage Insurance Premium is insurance on an FHA home mortgage. The borrower pays for this insurance (generally added on to the loan amount) incase the loan is defaulted on. There is an upfront MIP and a monthly add-on Mortgage Insurance that gets paid along with the Principle & Interest payments.
Below is a chart that represents the new FHA factors that have recently changed as of this month (April 2012). Based on Loan to Value (LTV) and the loan term (30 year mortgage or 15 year mortgage) the Annual MIP (which gets paid each month) varies:
Maple Tree Funding specializes in FHA Mortgages. The benefit of this type of mortgage and why the MIP exists is to allow the borrower to place a very small down payment on the home (currently 3.5% of the sales price of the home). The borrower usually finances the Upfront MIP into the loan amount.
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