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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