Question Details

T.A.B., Other/Just Looking in Gardiner, ME

what does monthly PMI mean??? thank you!!

Asked by T.A.B., Gardiner, ME Wed Aug 20, 2008

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Private Mortgage Insurance is required on FHA loans and any mortgage where you put down less than 20% of the purchase price. (with the exception of some VA loans)
1 vote Thank Flag Link Wed Aug 20, 2008
Monthly PMI refers to monthly privatge mortgage insurance payments. If putting less than 20% down, PMI has to be dealt with in some way-either by 1) splitting the mortgages into 2, commonly referred to as a 80/10, 80/15, etc. or 2) clients have the option of having 1 loan to 85%, 90%, 95%, etc. and paying PMI either as a separate monthly cost or having lender paid mortgage insurance which builds the PMI into the base interest rate. The PMI insurers the lender who is taking on the % of the loan which exceeds 80% of the home value. Please let me know if you need anything else.
1 vote Thank Flag Link Wed Aug 20, 2008
PMI is private mortgage insurance. It is only used on Conventional loans with less then 20% down payment. The typical rates are:
95% LTV = .62%-.78%
90% LTV = .49%-.55%
85% LTV = .32%-.35%
Increases may occur with lower credit score files

FHA has a form of PMI called MMI or monthly mortgage insurance. The rate as of feb-2013 is 1.35%. They also charge a Upfront Mortgage Insurance premium of 1.75%.

On either PMI or MMI, you multiple the percent times the loan amount. As an example $100,000 times .62% = $620 divided by 12 for a monthly amount of $51.66.

Steve Geving
Jones and Co Realty
0 votes Thank Flag Link Fri Feb 1, 2013
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