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PMI

California - CoastlineWhen financing a conventional loan over 80% of the value of the property, PMI will be required on conventional loan types. While it is most common for PMI to be quoted as a monthly expense, some PMI companies offer other options. There is also “Single Premium” and “Split Premium” so discuss what is best for you with your IPM representative. All PMI quotes will vary based on your credit score and ltv. On Single Premium PMI there is no monthly recurring expense, rather just an upfront charge. As an example, at 90% ltv with a 720 FICO the Single Premium cost is 1.72% (points) with Radian. A Split Premium quote for the same scenario is .50% (points) paid upfront and a monthly premium of .31% times the loan amount, divided by 12 months. A “Monthly Premium” quote with no upfront charge would be .44% times the loan amount, divided by 12 months to get the monthly PMI payment.

Be sure and discuss your many PMI options with your IPM representative. When negotiating a sales price with a seller, you may want to offer them a bit higher price, in return for a credit towards your closing costs to help pay for “Up Front Premiums”. Additionally, by taking a slightly higher interest rate, the lender will credit you a YSP (Yield Spread Premium) to help offset closing costs and or Single Premium PMI.

This link will take you to Radians PMI Rate Calculator. Feel free to look at your many options and call your IPM representative to answer your many questions.

 

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