Please Explain PMI

Home Purchase Private Mortgage Insurance is an insurance that will protect the Mortgage Lender.  The buyer will pay the premium. If you purchase a home and put 20% as a down payment, there is a 10%  difference between the down payment and the Mortgage Loan.  The lender wants a guarantee on that 10%  in case of foreclosure.  question

How much is PMI?  For simplicity,  here is a low ball example of how PMI words.

  • Home Purchase: $175,000
  • Loan amount $157,000
  • Insurer charges an annual premium of 0.49 percent
  • For an annual premium of $771.75
  • 12 monthly payments of $64.31 per month .

Now just multiply this up to get a pretty accurate month premium amount.
Note: Be sure and contact your lender when you reach 80%, as they must cancel the insurance. If not at 80% by Federal law they must at cancel at 78%.

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