Finance
What is 'mortgage insurance premium' (MIP) in the context of an FHA loan?
AA premium paid to ensure the mortgage rate stays fixed
BInsurance required on FHA loans that protects the lender against default, paid by the borrower✓ Correct
CInsurance for the borrower in case of job loss
DA premium paid only if the loan is more than 30 years
Explanation
FHA MIP (Mortgage Insurance Premium) protects the FHA/lender against borrower default. FHA requires an upfront MIP at closing plus annual MIP (paid monthly), regardless of the down payment amount for loans with LTV over 90%.
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