General Mortgage KnowledgeQuestion 120 of 400
Which statement correctly distinguishes PMI from MIP?
a.Both are only on VA loans
b.MIP is on conventional loans; PMI is on FHA loans
c.Neither can ever be removed
d.PMI is on conventional loans; MIP is on FHA loans
Explanation
Private mortgage insurance (PMI) applies to conventional loans with less than 20% down, while the mortgage insurance premium (MIP) applies to FHA loans. VA loans use a funding fee instead, and PMI can generally be removed at 78–80% LTV.
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