PRIVATE MORTGAGE INSURANCE

WHAT IS PRIVATE MORTGAGE INSURANCE?

Saving up for the down payment of your home is one of the most difficult things to achieve, especially for first-time homebuyers. For the buyers who aren’t able to make a down payment of 20%, Private Mortgage Insurance (PMI) is an option – but what exactly is it?

PMI is an insurance policy that protects the lender in case you are unable to maintain making payments. Financial institutions are much more likely to approve your mortgage without the full 20% down payment when you’re paying Private Mortgage Insurance.

 

HOW MUCH DOES PMI COST?

The cost of PMI is determined by several factors including your down payment amount, credit score, the type of interest rate (fixed or adjustable), or whether you’re using the loan to refinance an existing mortgage loan or purchase a home.

Typically, the premiums for PMI can range from $30-70 per month for every $100,000 borrowed. So if you bought a home with a value of $300,000, you might pay about $150 per month for private mortgage insurance, according to Zillow.

Most PMI is paid monthly but occasionally it can be paid in full for a single premium paid at your closing or financed into your mortgage loan.

 

HOW LONG DO I HAVE TO PAY PMI?

Once you have paid off about 80% of the original value and are current on your mortgage payments, financial institutions are required to cancel your PMI.

Using an Amortization Schedule is the easiest way to see how long it would take you. Simply enter the information in the four fields provided, click the checkmark to 'show payment schedule', and then see how many payments it will take for you to reach 80% of the original value.

 

HOW CAN I AVOID PAYING PMI?

One of the benefits of choosing Lisle Savings Bank for your home financing is our ability to not require you to pay PMI. As a portfolio lender, we can design loan programs like our First-Time Homebuyer Program and First-Time Homeowner Refinance Program to waive the requirement of paying PMI with a down payment of 10% or at least 10% in equity.

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Title Token Key Token Value
Loan to Value Ratio - 81-90% - 10 Year Rate {{LTV_8190_10year_rate}} 5.750
Loan to Value Ratio - 81-90% - 10 Year APR {{LTV_8190_10year_apr}} 6.016
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Loan to Value Ratio - 81-90% - 15 Year Payment Example {{LTV_8190_15year_pmt}} 1,381.25
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Loan to Value Ratio - 81-90% - 20 Year Payment Example {{LTV_8190_20year_pmt}} 1,218.08
Loan to Value Ratio - 81-90% - 25 Year Rate {{LTV_8190_25year_rate}} 6.500
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Loan to Value Ratio - 81-90% - 25 Year Payment Example {{LTV_8190_25year_pmt}} 1,114.09
Loan to Value Ratio - 81-90% - 30 Year Rate {{LTV_8190_30year_rate}} 6.625
Loan to Value Ratio - 81-90% - 30 Year APR {{LTV_8190_30year_apr}} 6.749
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Loan to Value Ratio - 81-90% - 30 Year Payment Example {{LTV_8190_30year_pmt}} 1,056.51
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Loan to Value Ratio - 71-80% - 20 Year Payment Example {{LTV_7180_20year_pmt}} 1,206.03
Loan to Value Ratio - 71-80% - 25 Year Rate {{LTV_7180_25year_rate}} 6.375
Loan to Value Ratio - 71-80% - 25 Year APR {{LTV_7180_25year_apr}} 6.511
Loan to Value Ratio - 71-80% - 25 Year Points {{LTV_7180_25year_points}} 0
Loan to Value Ratio - 71-80% - 25 Year Payment Example {{LTV_7180_25year_pmt}} 1,101.24
Loan to Value Ratio - 71-80% - 30 Year Rate {{LTV_7180_30year_rate}} 6.500
Loan to Value Ratio - 71-80% - 30 Year APR {{LTV_7180_30year_apr}} 6.623
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