How are my monthly escrow payments determined for mortgage insurance premium (“MIP”)?
The premium for mortgage insurance is due on the anniversary of the first principal and interest payment you make. The amount due will decrease every year because it is based upon the average principal balance for the following year. HUD provides an MIP Amortization Schedule within 6-8 weeks after closing. It discloses the amount due every year for the life of the loan. We divide the annual amount due by 12 to arrive at a monthly figure to collect.
