How to calculate private mortgage insurance?


Private mortgage insurance is calculated on a per thousand basis. This "per thousand" is based on the sales price of the property being mortgaged.

There are several factors that come into play when computing for private mortgage insurance. These are as follows:

  • When the loan was originated. New rules and new rates may apply, depending on when the loan was taken out.
  • The length of the loans. This refers to the number of years the mortgage is set to last.
  • Amount of down payment provided.
  • Mortgage insurance premiums paid up front. Depending on the kind, length and amount of down payment you pay, those who pay up front mortgage insurance premiums may or may not be asked to also pay monthly mortgage insurance premiums.

These three come into play. For instance, the table below shows how mortgage premiums on FHA loans are calculated. Please note that the rates and other applicable factors were based on the prevailing rates and rules as of this writing.

Loans originating after January 1, 2001

Down Payment Up Front MIP Monthly MIP
Less or equal to 4.99% 1.5% .50%
5 to 10% 1.5% .50%
More than 10% 1.5% .50%

To make it easier for you to compute, you may look for mortgage insurance charts of mortgage insurance calculators that are available online.

You can also ask your realtor or bank to help you calculate how much you need to pay for private mortgage insurance.

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