Do I need to pay mortgage insurance?

For conventional loans, if your down payment is 20% or more, you may not need to pay mortgage insurance. For lower down payments, you may need to pay private mortgage insurance (PMI) in some form. PMI could be financed as a lump sum payment, monthly payment, or a combination of both.

If your loan program is Federal Housing Administration (FHA), you likely need to pay a mortgage insurance premium (MIP) at closing and annually for at least 11 years during loan repayment for FHA loans closed on or after June 3, 2013. MIP may need to be paid for the life of the loan if your down payment is under 10%.

VA loans typically don't require mortgage insurance, but there is a concept of the funding fee that is an additional cost similar to mortgage insurance. However, funding fees may be reduced or waived in certain cases.

Please consultant your loan consultant for more information as mortgage insurance premiums likely differ across down payments, loan amounts, loan programs, and financing options.