Pmi/mip,funding fee financed?

Question

pmi/mip,funding fee financed?

Answer 1

PMI, MIP:   PMI (private mortgage Insurance), or MIP (mortgage insurance premium) may be required by your lender on a conventional loan if your loan-to-value ratio (LTV) is above 80 % or more.  The reason for this is that lenders feel that if the owner has at least 20% equity in their property, they will have the incentive required to keep up their monthly mortgage payments.  When the owner has less than 20% equity, the lender requires the owner to make insurance payments to protect the lender for the amount above 80% of the LTV in the event that the borrower defaults on the loan.  The mortgage insurance company compensates the lender for reduced borrower equity.

FHA loans require a 3.8% MIP plus an annual premium and are insured to the full extent of the amount of the default.

Funding Fee: VA loans have a Funding Fee that can be as high as 1.875% and have a maximum guarantee of $46,000.00.

If your loan amount is above 80% of the property's value based on the appraisal or the selling price (whichever is less) you may have to pay for mortgage insurance.