Finance
What is 'mortgage insurance premium' (MIP) versus 'private mortgage insurance' (PMI)?
ABoth terms mean the same thing and are interchangeable
BMIP is the insurance required on FHA loans (paid to the government); PMI is insurance on conventional loans (paid to a private insurer); both protect the lender✓ Correct
CMIP is paid by the lender; PMI is paid by the borrower
DPMI is for first mortgages; MIP is for second mortgages
Explanation
MIP (Mortgage Insurance Premium) is required on FHA-insured loans — paid upfront at closing (1.75% of loan amount) and annually. PMI (Private Mortgage Insurance) is required on conventional loans with LTV above 80% and is purchased from private insurers. Both protect the lender against borrower default; the borrower pays both premiums.
Related Delaware Finance Questions
- What is a 'due-on-sale' clause in a Delaware mortgage?
- A Delaware property is appraised at $310,000. The lender will loan 80% of appraised value. What is the maximum loan amount?
- What is a 'graduated payment mortgage' (GPM) in Delaware?
- What is 'amortization' in a Delaware mortgage loan?
- What is 'yield' in real estate investment and how is it calculated?
- A wraparound mortgage involves:
- A deed in lieu of foreclosure allows a borrower to:
- Which federal law requires lenders to provide a Closing Disclosure at least 3 business days before closing?
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →