---
title: What is the mortgage insurance premium (MIP) and upfront mortgage insurance premium (UFMIP)?
description: FHA financing requires borrowers pay both an upfront mortgage insurance premium at closing and monthly mortgage insurance throughout the life of the loan.
---

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# What is the mortgage insurance premium (MIP) and upfront mortgage insurance premium (UFMIP)?

## The mortgage insurance payments required for FHA loans.

The mortgage insurance premium (MIP) and upfront mortgage insurance premium (UFMIP) are both mortgage insurance payments required on [FHA loans](https://www.jvmlending.com/glossary/#fhaloan). As a reminder: [mortgage insurance](https://www.jvmlending.com/glossary/#mortgageinsurance) (MI) is an additional (and mandatory, in the case of FHA loans) insurance policy that **protects the lender**.

**FHA financing requires borrowers pay both an upfront mortgage insurance premium at closing and monthly mortgage insurance throughout the life of the loan**.

The upfront mortgage insurance premium (UFMIP) is 1.75% of the [base loan amount](https://www.jvmlending.com/glossary/#baseloanamount) and is **usually financed into the loan amount** rather than paid out of the borrower’s pocket at closing.

Unlike conventional financing, **the monthly mortgage insurance amount for FHA financing is at a set rate dependent upon property type and loan-to-value (LTV) ratio.** In exchange for the ongoing mortgage insurance, FHA financing has less stringent qualification requirements (e.g., higher debt-to-income ratios, lower down payment requirements, etc.).

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