MIP is commonly required for which loan type?

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Multiple Choice

MIP is commonly required for which loan type?

Explanation:
Mortgage Insurance Premium (MIP) is the insurance cost charged on FHA loans to protect the lender against borrower default. FHA loans commonly require MIP, even with a small down payment like 3.5%, which is their standard minimum. Conventional loans with a 20% down typically don’t require PMI, and VA loans don’t require mortgage insurance (they have a funding fee instead), while USDA loans use a different guarantee/fee structure. So an FHA loan with 3.5% down is the scenario where MIP is typically needed.

Mortgage Insurance Premium (MIP) is the insurance cost charged on FHA loans to protect the lender against borrower default. FHA loans commonly require MIP, even with a small down payment like 3.5%, which is their standard minimum. Conventional loans with a 20% down typically don’t require PMI, and VA loans don’t require mortgage insurance (they have a funding fee instead), while USDA loans use a different guarantee/fee structure. So an FHA loan with 3.5% down is the scenario where MIP is typically needed.

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