Question:

How can I calculate my PITI payment with PMI (private mortgage insurance)?

Answer:

Your PITI payment with PMI (private mortgage insurance) will depend on your LTV. For example, if you have 80% LTV you are not going to be charged mortgage insurance.

The insurance part of the PITI payment (principal, interest, taxes and insurance) refers to homeowners (hazard) insurance. Homeowners insurance is property insurance - your home is insured against damage; while a private mortgage insurance (PMI) takes care of the top 20% of your home value. Some lenders won't require PMI for loans with LTV up to 90%, but most want at least 80% LTV to drop it from the PITI payment.

Calculating PITI Payment with PMI

Just use a website PMI payment calculator - those usually require loan amount and down payment input. Usually, loans with 95% LTV and higher can have over 1% PMI monthly premium. Loans with 85% LTV and less will charge around 0.3% PMI.

According to the newest regulations, lenders are required to inform borrowers when they could drop PMI from the PITI payment. Upon inception of the loan you will be informed that when your loan reaches 80% LTV and you are current with the mortgage, you could ask that the lender drops PMI. At roughly 78% LTV, lenders are required to cancel PMI automatically.

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