Sample Mortgage Insurance Premiums

Typical Monthly Private Mortgage Insurance Premiums, Revised September 12, 2005 Down Payment as Percent of the Lower of Sale Price or Appraised Value   0 to 4.99% 5 to 9.99% 10 to 14.99% 15 to 19.99% FRMs         30-40 Years .96 .78 .52 .32 25 Years .85 .67 .41 .21 20 Years .80 .56 .23 .19 15 Years .80 .56 .23 .19           ARMs 1         30 Years 1.17 .88 .61 .33 25 Years 1.06 .77 .50 .22 20 Years 1.06 .77 .50 .22 15 Years 1.06 .77 .50 .22           ARMs2         30 Years 1.21 .92 .65 .37 25 Years 1.10 .81 .54 .26 20 Years 1.10 .81 .54 .26 15 Years 1.10 .81 .54 .26 Notes: Premiums are higher on investment and vacation properties, manufactured houses, and cash-out refinances. ARMs that have 5 years or more of level payments are considered FRMs. ARMs 1 are those with rate adjustment caps of 1% or less. All other ARMs are ARMs2. ARMs2 that allow negative amortization may have higher premiums. Down payments of less than 3% are likely to have credit score requirements. The premiums are for coverage required by Fannie Mae and Freddie Mac. No refunds are available. The premium rates are applied to the original loan balance, and hold for 10 years, after which they fall uniformly to .20% of the original loan balance unless they were already less than .20%, in which case they remain unchanged. Premiums are annual rates paid monthly. To obtain the monthly premium in dollars, multiply the figure shown in the table by the loan balance and divide by 1200. If the premium rate is .92 and the loan is for $100,000, for example, the monthly premium is $92000 divided by 1200, or $76.67. Under Federal law, premiums are automatically terminated when the loan balance falls to 78% of the original property value, and may be terminated earlier at the borrower's initiative when the balance reaches 80% of appreciated value. Copyright Jack Guttentag 2005

Jack Guttentag is Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania. Visit the Mortgage Professor's web site for more answers to commonly asked questions.

Search More Info On:

You'll be re-directed to Top-Lenders.com