Mortgage Insurance Premium (MIP)

The fee paid by a mortgagor to obtain Mortgage Insurance on a mortgage loan. The fee may be collected as a lump sum at loan closing or as a periodic amount included in the monthly payment, or both.

Premium paid by the mortgagor for Mortgage Insurance to either a private mortgage insurance company or to the Federal Housing Administration.

The fee paid by a mortgagor to obtain Mortgage Insurance on a mortgage loan. The fee may be collected as a lump sum at loan closing or as a periodic amount included in the monthly payment, or both.
Example: To obtain a mortgage loan insured by the FHA, the borrower must pay a mortgage insurance premium equal to 2.25% of the loan amount. Depending on the Loan-To-Value Ratio there may be a monthly premium as well.