My loan officer is telling me it is going to cost me $203 a month. I've seen rates as low as $65 a month. I also read somewhere that if the house you are borrowing is worth 20% more than you pay for it. You don't have to pay for PMI.
2007-09-23 06:02:05 · 7 answers · asked by Robin G 4 in Business & Finance ➔ Renting & Real Estate
If you put down less than 20% you will need PMI utill you have 20% equity by paying the loan down or by the prop appreciating to 20% equity. It you could buy a house 20% below market value and have the appraisal to show the equity then you would not need PMI.
2007-09-23 06:11:50 · answer #1 · answered by Leo F 4 · 0⤊ 0⤋
PMI is based on the amount of the mortgage, so $203 a month sounds about right. PMI rates are heavily monitored by the government with stiff penalties in place for overcharging...I can honestly say I have never seen an overcharge of PMI in my career.
If you are doing 100% financing, then you pay PMI. If you are doing an 80/20 loan, then you normally do not do PMI.
I am curious as to what rate you are getting, because 100% financing programs are on the endangered species list and the couple that I have access to the borrower must have pristine credit.
PMI is not as easy to get rid of as people think it is...just because your home appraises at 80% Loan to Value in a year or so does NOT mean you get to drop the PMI...people that claim that don't know how it works.
They go by your ORIGINAL appraised value at the time you bought the home...that is why people tend to refinance to get rid of PMI.
2007-09-23 06:20:43 · answer #2 · answered by Expert8675309 7 · 0⤊ 0⤋
PMI is not required when the loan is 80% or less then the value of the house. One thing also to note. The mortgage holder doesnt have to tell you when that happens so you may being paying PMI after the LTV goes below 80%. Then you need to request it.
In your case. You need to pay the PMI and since you dont put your loan value on the question, unable to get a real read on the PMI but it doesnt sound off.
2007-09-23 06:49:44 · answer #3 · answered by Bob D 6 · 0⤊ 0⤋
PMI, or Private Mortgage Insurance, is required for the first 20% of equity. In this market, it is difficult to find a property that is worth at least 20% more than the asking price. As for the rates, this depends on the amount of the loan, your credit, and other factors.
2007-09-23 06:20:20 · answer #4 · answered by Henry G. 2 · 0⤊ 0⤋
If your equity is less than 20%, PMI will almost always be required. How much it will cost you will depend upon your equity, the size of the mortgage, and often your credit profile. The choice of insurer is up to the lender in most cases; you don't get to shop this around. If you think your lender's insurer is asking too much you'll have to shop around for a different lender.
2007-09-23 06:12:42 · answer #5 · answered by Bostonian In MO 7 · 0⤊ 0⤋
depends on your credit score, loan amount, and loan to value.
if you have less than 620 credit score then you will have a HIGH PMI payment.
the factors are
for 95.01-100 loan to value...0.96%
90.01-95 ......0.79% etc
if you have a 200,000 mortgage and put 5% down...then your factor will be .79%. you will need to multiply the loan with this
190k x 0.79% divide by 12 months = 125.08 monthly MI
there are government products with discounted MI
2007-09-23 06:21:29 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Better than me giving you all my illustrious opinions I'll give you the source of information that will be absolutely correct.
HUD Private Mortgage Insurance (PMI) Information: http://www.hud.gov/offices/hsg/sfh/res/respapmi.cfm
That site tells you what the lender has to do also
Best of luck to you
2007-09-23 06:12:19 · answer #7 · answered by newmexicorealestateforms 6 · 0⤊ 2⤋