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How do you calculate private mortgage insurance for a home loan? |
I am looking to buy a home and because I am putting less than 20% down I was told I have to pay private mortgage insurance, I am wondering what is the calculation in order to determine what my monthly payment of pmi will be for a loan of $115, 000. Private Mortgage Insurance rates are usually set by the insurance company insuring the loan which is calculated with consideration to how much of the loan needs to be insured. In the case of an FHA loan (government insured), you pay part of your PMI upfront (1.5% of the loan amount) and the rest (.5%/12) in your monthly payment. On an FHA loan of $115,000 you would $1725 at closing plus a monthly PMI of $47.92. Plan on $67.03-$86.25 extra per month if not an FHA loan (.7%-.9% divided by 12 months). In australia, you can borrow up to 80% of the amount without Mortgage insurance, and 90% if you can easily make the payments the remaining amount is what you would use to calculate (in aust) may be a few thousand dollars on top of your loan you can actually go onto the bank's website and they should have the loan calculators which you can use and see repayments, interest etc goodluck :) The PMI premium is set by the company that is guaranteeing the mortgage. Your lender can give you the numbers. If varies based on the down payment, the size of the loan, and your credit history. Unlike P&I payments, there's no set formula. PMI just became tax deductible the other day so that is a benefit. Some loans have it built into rate and sometimes they split up your loan as an 80/20 so you avoid PMI. Check out this site for PMI rates or speak with a mortgage broker. http://www.pmi-us.com/index.html... Or you can view my site and learn some more info at www.ScottLushing.com Good luck! It vary's but as an average we see PMI costing $2 - $2.50 per $1000 of coverage. I would guess around $50 on your loan. There are many loan programs available with PMI built into the rate. I also suggest considering a possible second mortgage in lieu of a higher rate first or PMI. Here is some additional info. Hope this helps. Private Mortgage Insurance - Who needs it? http://www.tomvoli.com/2006/12/07/privat... it is tiered depending on how much you put down. the more you put down the less you are charged. the tiers are broken into 5% increments: 0 down, 5%, 10%, and 15%. You can also have your loan broken into a 1st and 2nd so you won't have any PMI. Get both scenarios from a Loan Officer to discuss. Keep in mind, PMI is now deductible. |
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