Mortgage Insurance, also known as PMI, is a supplemental insurance policy you may be required to obtain in order to get a mortgage loan. PMI is provided by private (non-government) companies and is usually required when your loan-to-value ratio — the amount of your mortgage loan divided by the value of your home — is greater than 80 percent.
Mortgage Insurance isn’t a bad thing — it allows you to make a lower down payment and still qualify for a mortgage loan. In fact without PMI, many of us would not be able to purchase our first home.
How is PMI calculated?
Types of Mortgage Insurance premiums:
- Monthly Premium. The amount to be paid for your mortgage insurance is calculated and divided by the number of months you will be required to carry it based on the amortization schedule and when you will reach 80% LTV.
- Financed Premium. Your mortgage insurance total is divided by the term of your loan, making the premium less per month, but carried over the life of the loan.
- Lender-Paid Premium. We can pay your mortgage insurance premium for you! This generally is funded by discount point(s) or a rate adjustment.
Your mortgage banker can illustrate the options for you and show how your monthly payment can be affected by Mortgage Insurance, if required.
St. Louis Mortgage Interest Rates – October 27, 2010
- 30-year fixed-rate 4.375% no points
- 15-year fixed-rate 3.750% no points
- 5/1 adjustable rate 3.250% no points
- FHA/VA 30-year fixed rate 4.375% no points
- Jumbo 5/1 ARM 3.625% no points
- Jumbo 15 year fixed-rate 4.250%
- Jumbo 30 year fixed-rate 5.125%
For more information or if you have questions on mortgage rates in St. Louis you may contact me by phone at my direct line, (314) 372-4319, email at rfishel@paramountmortgage.com or you can visit our company website at http://www.paramountmortgage.com.
*Note- The above rates are based upon a typical sale price of $187,500 with a 20% percent down payment leaving a loan amount of $150,000 to a borrower with a 720 credit score for a loan with no discount points charged. Rates and terms will vary depending upon loan amount, home value, credit and income of borrower.
This information is provided by this author and this site for informative purposes only and is not warranted or guarteed in any way.
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