How much private mortgage insurance cost ?

Hey pal,

If you want to take insurance on your mortgaged property, you should know about private mortgage insurance costs. This way you will have a ballpark idea and won't get duped into a lower deal. Take a look at the comment section to know everything I learned.

The short form is PMI. It is a kind of insurance that a borrower is required to purchase as an agreement in a conventional mortgage loan. Most lenders require PMI when you make a down payment that is less than 20% of the home's purchase price.

The cost of insurance depends on the lender. Taking the insurance protects the insurance provider’s investment in the property. It allows people to purchase a home sooner. If you put down an amount between 5% to 19.99% of the property’s cost, you will have to pay PMI. You can pay it in the form of monthly instalment and one-time payments.

I will give you an example now. If you purchase an Rs.300,000 flat, you will have to pay between Rs.1,500 – Rs 3,000 each year in private mortgage insurance rates.

• You can calculate the cost of insurance by taking the PMI percentage shared by your lender and multiplying it with the total loan amount. 

• In case you aren't aware of your PMI percentage, calculate the high and low ends of the standard range. 

• I use 0.22% to find out the low end and use 2.25% to find out the high end of the range.

This is all from my end on private mortgage insurance cost.

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