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Reverse Mortgage Glossary

IMIP, Initial Mortgage Insurance Premium

IMIP, Initial mortgage insurance premium

Note that this article reflects the new IMIP rates implemented by FHA on 10/2/2017.

Initial mortgage insurance premium, or IMIP, is a one time fee paid at loan closing that goes to FHA to help insure the HECM reverse mortgage. This protects both borrower and lender in the event the home isn’t worth enough to settle up the entire loan balance at the time the reverse mortgage is due and payable.

It is this fee, in part, that makes the HECM reverse mortgage a non-recourse mortgage product. The most that will ever have to be paid back by the borrower is the value of the home – even if the home isn’t worth enough to settle the entire loan balance.

Most lenders allow borrowers to roll this fee into the new loan amount so that it doesn’t have to be paid out of pocket.

Note that FHA also charges MIP (ongoing mortgage insurance premium) on an ongoing basis until the loan balance is repaid.

FHA assesses the IMIP at a flat rate of 2% of the maximum claim amount (the appraised value for most people) regardless of how much you borrow at closing.