Mortgage closing cost?

Because down payment is NEVER part of closing costs. Down payment is down payment. It is equity in the home. In theory it will be returned to you one day. Closing costs are not equity. Appreciation in value may pay for those costs, and pay the closing costs when you sell, but they are separate and distinct from the down payment.

The upfront MIP premium is technically not a closing cost, either, just as other pre-payables like property taxes and homeowner's insurance are not closing costs.  It's just that so many real estate 'professionals' have gotten in the bad habit of lumping everything together to give you one single number for cash needed to close - which covers everything, down payment, pre-payables and closing costs - that many buyers don't understand the difference.

Update.  You will be credited with the deposit money. The balance of the down payment is due at closing, along with everything else.

If you still owe 5% of the purchase price, then your total down payment was more than 5% - it was 5% plus the amount of the deposit.  The combined amounts plus the mortgage amount should equal the purchase price.

The remaining 5% will be shown as "cash to close" on the closing document.

Because your MIP insurance is owed annually.

You pay 1 year before you own the house as part of your closing cost, just like your homeowners insurance.

The amount you pay in the escrow monthly payment will be for your 2nd year coverage.

Usually, 1 years MIP in collected upfront and held in escrow.