FHA loans are often seen as a good option for borrowers with less money saved up as these loans allow down payments as low as 3.5%. However, because of this, it’s impossible to avoid MIP on an FHA loan.
If you have enough cash saved up to make a 20% down payment, applying for a conventional mortgage might be a better option for you. When you make a 20% down payment on a conventional loan, you won’t have to pay for mortgage insurance.
Additionally, if you put less than 20% down on a conventional loan, you’ll be able to have PMI removed when you reach 20% equity in your home, which isn’t usually the case for MIP on FHA loans.