Question:

What mortgage insurance premiums depend on?

Answer:

Mortgage insurance premiums depend on the down payment you put towards the loan; the type of mortgage instrument, and the duration of the loan.

When are mortgage insurance premiums real expensive?

Long term Option ARMs with less than 5% down payment will require 1.20% annual rate paid monthly. Option ARMs allow negative amortization and are considered high risk. Therefore, they will ask for the highest mortgage insurance premiums.

Short term fixed rate mortgages with 15% down payment and higher can ask for as little as 0.19% annual mortgage insurance charge.

Additionally, mortgage insurance premiums are higher on second homes, investment properties, mobile homes and cash-out refinances. They also depend on credit score rating of the loan applicant.

Calculate Monthly Mortgage Insurance Premiums

To arrive at your monthly mortgage insurance charge, multiply your remaining loan balance by the annual insurance rate, obtained from the lender, and divide it by 1200.

For example, the mortgage insurance premium for a loan balance of $150,000 at annual mortgage insurance rate of 0.47% is $58.75.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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