Upfront MIP is collected on which type of loans?

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Prepare for the Utah Mortgage PLM Exam. Study with flashcards and multiple choice questions, with each question providing hints and explanations. Gear up for test day!

Multiple Choice

Upfront MIP is collected on which type of loans?

Explanation:
Upfront MIP is the upfront fee that FHA loans require to fund mortgage insurance for borrowers with lower down payments. This charge is paid at closing and can sometimes be rolled into the loan. It is specific to FHA financing, which is why this option stands out. Conventional loans use private mortgage insurance (PMI) if needed, USDA loans have a separate upfront guarantee fee, and VA loans don’t require mortgage insurance (they have a funding fee instead). So the loan type that collects Upfront MIP is the FHA loan.

Upfront MIP is the upfront fee that FHA loans require to fund mortgage insurance for borrowers with lower down payments. This charge is paid at closing and can sometimes be rolled into the loan. It is specific to FHA financing, which is why this option stands out. Conventional loans use private mortgage insurance (PMI) if needed, USDA loans have a separate upfront guarantee fee, and VA loans don’t require mortgage insurance (they have a funding fee instead). So the loan type that collects Upfront MIP is the FHA loan.

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