Definition: In FHA financing, mortgage insurance premium is the charge for insurance protecting the lender against specified losses if the borrower defaults.
Example
An FHA borrower pays an upfront premium and an annual premium collected through monthly payments, as the program requires.
Keep the distinction clear
MIP protects the lender, not the borrower's equity or household belongings. FHA premiums differ from conventional private mortgage insurance, and cancellation rules are not interchangeable.
Related terms
Upfront Mortgage Insurance Premium (UFMIP) · Private Mortgage Insurance (PMI) · Federal Housing Administration (FHA)
Keep studying
Loan-to-Value, Down Payments, Equity, and PMI
References: CFPB: mortgage insurance
Pronunciation (US): MOR-gij in-SHOOR-uhns PREE-mee-uhm (capitals show stress)
Pronunciation reference: Merriam-Webster
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