Hi Ebdb, I’m going to split this answer between Non-FHA and FHA purchase financing (refinancing can be different).

To start, if we are talking about Non-FHA purchase financing there are quite a few variables (determined by the insurer) that can influence the calculation of the PMI premium. For example, MGIC has an online PMI Calculator here: http://www.mgic.com/is/html/ratefinder.html

23 different variables are utilized:

1) HFA affordability+ Code: [for a special type of loan]
2) PMI Insurance Type: [Borrower or Lender Paid]
3) Lender State
4) AUS Status [Automated Underwriting (UW) Systems provide codes based on the credit worthiness of the file]
5) FICO Score
6) Traditional/non-traditional UW Guidelines
7) First Time Home Buyer
8) Property State
9) Loan Type
10): LTV Ratio
11) PMI Premium Type
12) Occupancy Type
13) Loan Term
14) Loan Purpose
15) Base Loan Amount
16) PMI Renewal Type
17) PMI Coverage % [varies based on lender]

“Special Features”
19) Interest-Only
20) Declining Market
21) Relocation Loan
22) Unit Property
23) Mobile/Manufactured Home

RMIC is another mortgage insurer. For comparison purposes their calculator can be found here: http://rateestimator.rmic.com/


Switching gears, in the case of a FHA purchase loans the calculation is much more “simple.” FHA purchase loans require payment of an upfront mortgage insurance premium (UFMIP) equal to 1.75% of the base loan amount (which can be financed, if desired).

In addition there is a monthly PMI fee that is dependent on LTV, as follows:
Loan term >15 years: < = 95% - 0.50%, >95% - 0.55%
Loan term 95% - 0.25%

This monthly PMI “renews” annually based on the new base loan amount, so overtime the PMI payment gradually reduces. (Cancellation of PMI for both loan types is covered below).

“First Year” FHA Mortgage Insurance Example
(Assume: Base Loan Amount = $100,000 & Loan term >15 years: < = 95%)
UFMIP= 100,000 x 1.75% = $1,750
“First Year” Monthly PMI = 100,000 x 0.50% = 500, 500/12= $41.67

PMI CANCELLATION
There is an important distinction to make between Non-FHA and FHA as well. As you are probably already aware, Non-FHA loans allow for the removal of PMI once the market-based equity in the home reaches 20%. FHA loans are quite different in this respect. With FHA you will have to pay Mortgage Insurance for a MINIMUM of 5 years, and until you have paid your original LOAN AMOUNT down to 78% (not that the loan amount is 80% of current market value, which is typical for non-FHA MI removal). For all but 15-year term mortgages, you will pay MI premiums for the GREATER of five years or until the amortized loan-to-value reaches 78 percent. This "78% or 5-year Rule" before Mortgage insurance can be terminated is covered here: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/fi…

Best, Steve

Hello Ebdb,

You can use this link and calculate. In case you have any question please feel free to contact me.

http://web.wn.net/~usr/javafun/calculate.htm