What impacts your Private Mortgage Insurance (PMI) rate when you buy a property with less than 20% down?
Lenders prefer that you put at least 20% down, but if you push hard enough, many will allow you to put less than 20% down if you're willing to purchase insurance to protect them in case you default. This insurance is called Private Mortgage Insurance.
The cost of this insurance depends on several factors. Some are primary factors and have a significant impact on the cost of the insurance policy. Other factors are secondary and affect the premium, but only to a smaller extent.
In this mini-class, James will go over the things that affect your private mortgage insurance rate if you decide to put less than 20% down when buying properties.
Discussed In This Podcast
What is Private Mortgage Insurance (PMI) and why does it exist?
Factors that affect your PMI rate
Loan-To-Value of the property (often just the first lien)
Coverage amount for the lender
Your credit score
Amortization term of the loan itself - shorter terms have lower PMI
Fixed and variable payment amounts
Time you’ve been paying the rate
Lender (separate pricing sheet for Credit Unions)
Hard minimums for PMI rates
Cash-out refinance
Second home
Employee relocation loans
Manufactured Homes
Investment Property
3-4 units
Lender-Paid Monthly Premium
Declining Renewals
Annual Premium
Refundable Monthly Premium
High Debt-To-Income Ratio (> 45% DTI)
More than 1 borrower on the loan (reduces PMI rate)
Plus much more...
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Enjoy!
Love,
James Orr
*As of January 20th, the total number of downloads across all Real Estate Financial Plannerâ„¢ city-specific real estate investing podcasts for all episodes over all-time is over 77,998.
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