The upfront Mortgage Insurance Premiums (MIP) are either 2.5% or .5% depending on how much of the Principal Limit (amount you can borrow) you use in the first year. If your total mandatory obligation payoffs (existing mortgage payoff, tax liens, closing costs, upfront mortgage insurance premium) exceed 60% of the Principal Limit your upfront MIP is calculated at 2.5% of your homes appraised value up to the national lending limit of $625,500. If your total mandatory obligations and cash taken in the first year are 60% or less of the Principal Limit your upfront MIP charge is .5% of the homes appraised value or national lending limit (whichever is less).