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***Picture from Realtor.com***
Your lender is referring to a MIP charge on top of your interest and prinicpal payment on your mortgage? You may wonder what that is and why you have to pay for it. MIP stands for Mortgage Insurance Premium. You may have heard people say that you need 20% down to buy a home. That is no longer always the case, thanks to MIP. There are some mortgage loans now - both FHA and Conventional - that require as little as 3.5% down payment. That is an option thanks to MIP.

Lenders are more willing to risk you not defaulting on your mortgage because they have the MIP insurance to help mitigate some or all of the loses if you do default. The big benefit to MIP is that it puts homeownership within reach of those that don't have a 20% down payment.

All FHA loans require MIP insurance. It use to be the rule that you only were required to carry it until your mortgage balance dropped to 80% or lower of your home's value. But now FHA requires you to carry the insurance for the life of that loan. One way to terminate the MIP on an FHA mortgage is to refinance into a conventional loan.

Most conventional loans also require an MIP payment if you are putting less than 20% down - but with conventional loans you have the chance of having that removed once your equity reaches 20% of the value of your home.

To get more details, click on the "Read More" button at the bottom of the page.

Whenever you are ready, here’s some ways that I can help with your real estate goals:

1) Free Access to search the Denver MLS for all homes currently on the market: Denver Home Finder Service Property Search

2) Join me for a home tour - Home tours are Monday thru Saturday at 2:00 pm or 6:00 pm - choose your tour here

3) Request a specific search that sends all the homes that meet your parameters as soon as they come on the market - that way you can beat others to the best homes. Send me an email with "specific search" in the subject line and your wish list - Price range, school district, style, minimum number of bedrooms, etc. - Vickie@DreamsCanHappen.com

4) Receive a Home Loan Report –There are so many different loan programs. Do you need 20% down payment to purchase a home? Are there special programs for first time home buyers? What does CHFA mean? What's the difference between a FHA loan and a Conventional loan? Send me an email - - Vickie@DreamsCanHappen.com with "Home Loan Report" in subject field and I'll send it right over.

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