What are all the Upfront costs of an FHA loan, specifically MIP?

[Zeeshan Mallick]

Hello,

I am looking to buy my first rental property via house hack when my lease expires in July 2020. Because a shortage of initial funds, I am going to put a down payment via 3.5 % FHA Loan. However, I have a few questions on all the upfront costs for obtaining a property this way:

Upfront Costs (as I understand them) :

-FHA down payment (3.5 %)

-Closing costs

-MIP ????

I have been hearing around the internet that if you pay a down payment of 3.5 %, you have to pay an upfront MIP cost when buying the property. Online I have read the following definition " MIP stands for mortgage insurance premium and is required to close an FHA loan. It is paid as an upfront cost and as an annual premium"

I am a bit confused, because I thought the PMI is the monthly amount you pay because the loan is under 20%, is there also an upfront MIP you have to pay? Then on top of that, do you have to pay an MIP amount each month as well as a PMI amount?