Finance
A Texas borrower obtains an FHA loan. FHA mortgage insurance premium (MIP) differs from conventional PMI because:
AMIP is paid by the lender, not the borrower
BFHA MIP includes both an upfront premium and an annual premium, and may remain for the life of the loan✓ Correct
CMIP automatically cancels when the LTV reaches 80%
DMIP is only required for loans over $500,000
Explanation
FHA MIP includes an upfront premium (UFMIP, usually 1.75% of the loan amount) and an annual premium. For many FHA loans, MIP remains for the life of the loan (if the down payment is less than 10%), unlike conventional PMI which cancels at 80% LTV.
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