What is the difference between pmi and mip

Mortgage rates could change daily. Actual payments will vary based on your individual situation and current rates. Some products may not be available in all states. Some jumbo products may not be available to first time home buyers. Lending services may not be available in all areas. Some restrictions may apply. The lock period for your rate is 45 days. Therefore, the rate and payment results you see from this calculator may not reflect your actual situation. Rocket Mortgage offers a wide variety of loan options.

To get more accurate and personalized results, please call to talk to one of our mortgage experts. View Rates. What Is PMI? What Is MIP? But what other differences are there? Annual Costs In addition to the 1. PMI rates typically range between 0. Pros And Cons Of PMI Whether a low down payment conventional loan and the mortgage insurance that comes with it makes sense for you depends on your individual financial situation.

Can be more affordable for borrowers with higher credit scores or higher down payments: If you have a good credit score, you could potentially get a better rate with PMI than you would with the FHA MIP, which can translate into a lower monthly payment.

Cons Can be difficult to qualify for: FHA loans are often easier to qualify for than conventional loans. Most conventional loans require borrowers to have a credit score of at least , while most FHA loans require a credit score of May be more affordable than PMI if you have lower credit: Even if you do qualify for a conventional loan, if you have a fair or average credit score, you may find that you have a lower monthly payment with MIP than you would with PMI.

You might also want to consider other loan options. These loans are reserved for military members, veterans, and their surviving spouses. Our loan officers can give you the personalized advice you need. March 30, March 30, Source:. Apply For A Mortgage. Speak With a Loan Officer Have questions? No extra payment is required to the mortgage company or a private mortgage insurance provider.

Frequently, the single premium is coupled with seller-paid closing costs. Sellers of primary residences may pay a part of the buyer's closing costs, which include the PMI charge. Read more about seller paid closing-costs Single premiums are offered in two forms: refundable and non-refundable. If the loan is paid off early, the borrower receives a portion of the single payment returned. If the loan is returned early, any earned premium is forfeited with the non-refundable option.

The single premium that is non-refundable is less costly. The split premium option combines the one-time payment and the monthly premium into a single premium. Borrowers may be required to pay a part of the mortgage insurance upfront in exchange for a reduced monthly payment. The monthly cost is proportional to the initial cost. Credit score also has an effect on the monthly cost. The fourth option is lender-paid mortgage insurance, or LPMI. This option requires the lender to pay a single fee to the mortgage insurance provider and charges the borrower a higher interest rate.

This form of payment should be compared against the monthly payment to see which is better. There is a trade-off between a higher interest rate and a decreasing monthly mortgage insurance cost in the future.