Mortgage insurance : The Less Your Down Payment, the More It Costs

The purchase of mortgage insurance will allow less cash down and a higher loan amount, but it will cost you. How much? That depends on the cash down, the loan term, the type of loan, the particular mortgage insurance company, the type of premium that is paid, or if it is computer underwritten.

Normal, private mortgage insurance is now a simple monthly payment determined by the amount of coverage required, the amortization period, type of loan, and the LTV. To list all the types of properties, the LTVs, coverages, and so forth 72 L-T-V (Loan-to-Value) Means R-E-S-P-E-C-T would take a great deal of space, and they do change. Just to give you an idea, here are some standard coverage and costs for an owner-occupied residence with an amortization over 20 years.



LTV COVERAGE RATE
97% 35% .95/1000
95% 30% .78/1000
90% 25% .52/1000
85% 12% .32/1000
The rate is divided by 12 and added to the monthly payment: $100,00 loan, 90%LTV = 1,000 × .52 = 520/12 months = $43.33/ month. These numbers only show what the relative cost can be Premiums change with time and companies.