Here's what Mortgage Insurance is costing you now, and here's what the increase will cost.
Let's look at an example of a $200,000, here in Tulsa, Oklahoma you can get a nice home for this amount.
*Note that PMI costs more with conventional financing which means that you are paying a below market rate for the insurance with FHA financing which explains why FHA is currently losing billions of dollars each year. You can avoid PMI by putting 20% down. Check with your experienced loan professional.
Currently, PMI with 30 yr financing is 1% up front and .9% per month. (LTV greater than 95%)
So with our example, you would pay $2,000 upfront at closing and then $1,800 each year or $150/month.
On April 18th, the monthly PMI will increase by .25% so your yearly PMI will go up to $2,300 (1.15%) or $192/month. You can use a rule of thumb of roughly $20 more per month per $100,000.
Now, if you are paying PMI now and want it removed, you have to show that you have 20% equity in your house. The problem is that HUD often wants to use the original appraisal so it is difficult to remove PMI with a new appraisal that shows 20% appreciation on your home. If you pay down the principal, you will have a stronger case. Also, when you apply for removal of PMI, if you have had late payments in the last year, you can get turned down. Some loans will have a minimum period that you will have to pay PMI.
This eHow link has good information on removing PMI.
*Information believed to be accurate but not guaranteed. Consult with your local loan professional for more details.
Bank of Oklahoma -Phillip Morrow 918-488-7147
F & M Bank -Brett Casper 918-810-6950