An agent asked for this blog in December, and I am finally getting to it but should have done so much sooner because it was a great request!
As an aside, if any readers would like to see me blog about something in particular, please feel free to email your requests, as I greatly appreciate them.
Estimating Private Mortgage Insurance (PMI)
In July, I explained why PMI is pretty awesome, and here are a few of the reasons: it is very cheap now; it is easier to eliminate now; and it saves deals when appraisals come in low or when debt ratios are too high.
But – I did not explain how to estimate PMI, or show just how low payments can be.
The below two tables set our various PMI estimates for a $500,000 loan with two different Credit Score scenarios (680 and 740) and three different loan-to-value ratios (85%; 90%; and 95%).
Note that the “rates” are expressed in annual terms as a % of the loan amount, e.g. a “rate” of 0.2 against a $500,000 loan will give you a monthly payment of $83 (0.2 x $500,000/12 = $83).
The below rate estimates were obtained by “shopping” PMI with several of the top PMI firms, including MGIC, Radian, Arch MI, and National MI.
PMI In Terms of Annual “Rates”
| LTV | 85% | 90% | 95% |
|---|---|---|---|
| Score: 680 | 0.2 | 0.4 | 0.53 |
| Score: 740 | 0.13 | 0.23 | 0.3 |
PMI In Terms of Monthly Payments
| LTV | 85% | 90% | 95% |
|---|---|---|---|
| Score: 680 | $83 | $167 | $220 |
| Score: 740 | $54 | $96 | $125 |
PMI Rate Cards (So Consumers Can Shop Rates Themselves)
The below links take readers to rate cards for three of the PMI firms we work with.
Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167
