How To Calculate Mortgage Insurance
(Trenton, Ohio, USA)
Ask Kate How To Calculate Mortgage Insurance: My mortgage broker stated that my private mortgage insurance will be around $720 a year. Is this figure too high?
I am purchasing a home for $81,000, with no down payment. My credit score is considered good but not excellent. I had an earlier mortgage broker who stated my PMI would be around $35 per month. Which one is right?
Kate Answers: How To Calculate Mortgage Insurance
Dear Mike, There is no one-size-fits-all when it comes to the cost of mortgage insurance.
To calculate PMI, private mortgage insurance companies take into consideration credit scores and the amount of down payment, like you mentioned.
However there are other qualifying factors such as the type and term of the home loan. For instance, mortgage insurance for a 30 year fixed rate mortgage
would be higher than for a 15 year term
If you go to How Do Lenders Calculate PMI
, I present more details for estimating premiums.
But to know how much mortgage insurance will be for you specifically, your lender must submit a request for coverage to the mortgage insurance company, on your behalf. This mirrors a loan application process.
Until the mortgage insurance company comes back with their quote, mortgage brokers are only estimating the amount.
Just as important as asking how to calculate mortgage insurance is allowing for time in your transaction for the MI process. Go here for more information on time frames for PMI decision making
Mike, one more thing. I'd like to hear back from you. Let me know if this page is helpful to you. Anyone can Comment on How To Calculate Mortgage Insurance
. Or Ask Kate another question here
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