Understanding FHA Mortgage Insurance and How MIP Impacts Your Payments
Private Mortgage Insurance applies to conventional loans when the down payment is less than 20 percent. One advantage of PMI is that it can usually be removed once the borrower builds enough equity in the home.
Mortgage Insurance Premium works differently.
MIP is required on all FHA loans regardless of the down payment amount. Even a borrower putting down more than the minimum 3.5 percent will still have mortgage insurance as part of the loan structure.
FHA collects mortgage insurance in two ways. There is an upfront premium paid at closing, and an annual premium divided into monthly installments added to the mortgage payment.
Student Loans and Mortgages: What You Need to Know
Even if your student loan is in deferment, most lenders still count a monthly payment in your debt-to-income ratio, or DTI. The tricky part is that each loan program has its own rules. That means the same $75,000 loan balance could be treated very differently depending on whether you apply for a VA, FHA, USDA, or Conventional loan.