What is Upfront Mortgage Insurance Premium?
Upfront mortgage insurance premium is a one-time fee paid at closing on certain government-backed loans, separate from ongoing monthly mortgage insurance.
Upfront mortgage insurance premium is a one-time charge paid by the borrower at closing, commonly associated with FHA loans. It protects the lender against default and is calculated as a percentage of the base loan amount. Borrowers encounter it when using an FHA loan, and it may be financed into the loan amount or paid in cash. Watch for the difference between upfront and annual mortgage insurance premiums, as both may apply. The upfront portion is non-refundable, and the annual portion is paid monthly. Understand how it affects your closing costs and total loan cost.
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