Mortgage Insurance Premium (MIP)
Paid by a borrower for mortgage insurance - either to the FHA or to a private mortgage insurer.
MIP (Mortgage Insurance Premium) is an upfront insurance charge on an FHA mortgage loan. MIP is usually just added to the loan amount, but can be paid in cash at the closing. This insurance protects the lender in the event of a default on the loan by the borrower. MIP is not PMI (Private Mortgage Insurance).
When getting an FHA loan, the MIP must be paid up front. An industry term for this is UFMIP (up front mortgage insurance premium).
Mortgage insurance premiums are not tax deductible fee's.
Since the money is financed you must also take into consideration that you are paying interest on this.
If you do not plan on being in the home for very long check into the refund of the MIP.
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