There are different "factors". For example, it is based on LTV, credit score, ARM vs. Fixed to determine the "factor". Once you determine the factor, you multiply that by the loan amount. For example, on a 100% 30 Yr Fixed loan and a lender requires 35% coverage, that would be a Factor of .96%. You multiply .0096% by the loan amount. Then you divide by 12 to get your monthly MI payment. For example a $200,000 loan, with a cov. of 35% and .96 factor. 200,000 X .0096 = $1920. $1920/12 = $160. You can go to differnet mortgage insurance wbesites to determine what coverage equals what factor. United GUaranty, MGIC, RGIC, GE, etc offer MI. [ Edited by Devlon on Date 10/14/2004 ]
I am selling a property where my buyer has pretty horrible credit, at 100% LTV, and the PMI is $721.15 on a $210k purchase. That is a factor of .0034357.
Seems rediculus to me but who am I to say anything if my buyer and the bank are comfortable.
Quote:
On 2004-10-14 12:55, Devlon wrote:
There are different "factors". For example, it is based on LTV, credit score, ARM vs. Fixed to determine the "factor". Once you determine the factor, you multiply that by the loan amount. For example, on a 100% 30 Yr Fixed loan and a lender requires 35% coverage, that would be a Factor of .96%. You multiply .0096% by the loan amount. Then you divide by 12 to get your monthly MI payment. For example a $200,000 loan, with a cov. of 35% and .96 factor. 200,000 X .0096 = $1920. $1920/12 = $160. You can go to differnet mortgage insurance wbesites to determine what coverage equals what factor. United GUaranty, MGIC, RGIC, GE, etc offer MI.
<font size=-1>[ Edited by Devlon on Date 10/14/2004 ]</font>
Based on the post above I found these neat calculator. I looked around and it seems that all PMI rates are the same. Maybe this is something madated by law??
Either way you can play with different senarios to see what comes out.
I have a question I would like to tag on to this discussion. I have been paying PMI on a condo for 1 year. In that year my equity has grown 100K. Could I refinance now and get rid of the PMI? Would it be worth it if I am planning on selling in one year?
How much is your PMI payment? If the cost of a new appraisal exceeds the total amount you would pay in PMI for the next year then it wouldn't make sense. But I hope that is not the case.
If you choose to get an appraisal done make sure it is approved by your lender first.
As long as your equity has grown so your loan is now at 80% loan to value you should be able to get the PMI taken off loan without refinancing. Call your lender, they call get appraisal if they need. Sometimes you can get a drive-by appraisal with isn't as detailed but will work in this case.
There are different "factors". For example, it is based on LTV, credit score, ARM vs. Fixed to determine the "factor". Once you determine the factor, you multiply that by the loan amount. For example, on a 100% 30 Yr Fixed loan and a lender requires 35% coverage, that would be a Factor of .96%. You multiply .0096% by the loan amount. Then you divide by 12 to get your monthly MI payment. For example a $200,000 loan, with a cov. of 35% and .96 factor. 200,000 X .0096 = $1920. $1920/12 = $160. You can go to differnet mortgage insurance wbesites to determine what coverage equals what factor. United GUaranty, MGIC, RGIC, GE, etc offer MI. [ Edited by Devlon on Date 10/14/2004 ]
Where do you get these factors?
I am selling a property where my buyer has pretty horrible credit, at 100% LTV, and the PMI is $721.15 on a $210k purchase. That is a factor of .0034357.
Seems rediculus to me but who am I to say anything if my buyer and the bank are comfortable.
Quote:
On 2004-10-14 12:55, Devlon wrote:
There are different "factors". For example, it is based on LTV, credit score, ARM vs. Fixed to determine the "factor". Once you determine the factor, you multiply that by the loan amount. For example, on a 100% 30 Yr Fixed loan and a lender requires 35% coverage, that would be a Factor of .96%. You multiply .0096% by the loan amount. Then you divide by 12 to get your monthly MI payment. For example a $200,000 loan, with a cov. of 35% and .96 factor. 200,000 X .0096 = $1920. $1920/12 = $160. You can go to differnet mortgage insurance wbesites to determine what coverage equals what factor. United GUaranty, MGIC, RGIC, GE, etc offer MI.
<font size=-1>[ Edited by Devlon on Date 10/14/2004 ]</font>
Thank you for your replies, so just to make sure I have this correct
$200,000 x .0085 = $1,700 / 12 = $142
How much does this premium (.0085) change? does it depend on the loan amount?
Based on the post above I found these neat calculator. I looked around and it seems that all PMI rates are the same. Maybe this is something madated by law??
Either way you can play with different senarios to see what comes out.
http://www.mgic.com/prodratecalc.html
That is a good link.
I have a question I would like to tag on to this discussion. I have been paying PMI on a condo for 1 year. In that year my equity has grown 100K. Could I refinance now and get rid of the PMI? Would it be worth it if I am planning on selling in one year?
How much is your PMI payment? If the cost of a new appraisal exceeds the total amount you would pay in PMI for the next year then it wouldn't make sense. But I hope that is not the case.
If you choose to get an appraisal done make sure it is approved by your lender first.
As long as your equity has grown so your loan is now at 80% loan to value you should be able to get the PMI taken off loan without refinancing. Call your lender, they call get appraisal if they need. Sometimes you can get a drive-by appraisal with isn't as detailed but will work in this case.
Thank you so much for your input. That helps me a lot. I will call my lender tomorrow.