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How
to calculate private mortgage insurance
As
mentioned in other sections, there are two factors that determine
how much mortgage insurance a home buyer will pay: 1) the
type of loan and 2) the amount of down payment. Using the
chart below, you will see what percentage the home owner will have
to pay for the outlined home loan programs.
| %
down |
30
year fixed |
15
year fixed |
1
year ARM |
| 5% |
0.78% |
0.72% |
0.92% |
| 10% |
0.52% |
0.46% |
0.65% |
| 15% |
0.32% |
0.26% |
0.37% |
Each
lender will have a different rate chart that they use. In
general, the percentages listed above are the most common factors
used when calculating mortgage insurance.
For
a consumer to estimate the cost of mortgage insurance, use the
following calculation to determine the monthly cost:
Loan
amount x factor / 12
For
example, if a home buyer is getting a 30 year fixed
rate loan and putting 10 percent down on a home with
a $100,000 loan, the mortgage insurance factor is
0.52% (or 0.0052). To calculate the mortgage
insurance, the calculation would be:
100000
x 0.0052 = 520
520 / 12 = 43.33
The
monthly mortgage insurance would be $43.33 per month
or $520 per year.
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