Do I need to have both homeowners insurance and FHA MIP if I have a FHA loan?
I pay both regular homeowners insurance (through American Family insurance) and the MIP (through my FHA loan). My question is, if I pay the required MIP, do I also need the regular homeowner's insurance through American Family insurance? Once the MIP reaches 78% of the loan, I understand I will not be required to have this. Is it then my "choice" to carry homeowner's insurance?
For FHA loans, it is called MIP (Mortgage insurance premium). For a conventional loan it is called PMI. If I had a conventional loan, would I be required to have PMI as well as homeowners insurance?
Oh and one more thing...if you took a FHA loan after 2001 you are only required to have MIP until you reach 78% of the loan (based on the original appraisal or original loan). Prior to 2001, MIP was required the entire life of the loan.
- efflandtLv 710 years agoFavorite Answer
You will be required to have homeowners insurance as long as you have a loan on the property. If you do not have insurance they will charge you much more for their own force placed insurance, primarily to protect their interests, not yours. Read your loan documents.
- AnonymousLv 710 years ago
it's not MIP, it's PMI. And yes, you need both. You have to keep the homeowners policy until the loan is paid in full.