HELP! PMI, MIP, Funding Fee:
Funding Fee: 
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, and 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.  If you know you will have to pay for mortgage insurance, enter the amount in the field provided.  If you know you won't have to pay for mortgage insurance, or you don't know what the payment will be, leave the field blank.

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