PMI Payment Options
Private mortgage insurance can be paid on either an annual, monthly or single premium
plan. Premiums are based on the amount and terms of the mortgage and will vary according
to loan-to-value ratio, type of loan, and amount of coverage
required by the mortgage company.
Under an annual plan, an initial one year premium is collected up front at closing, with
monthly payments collected along with the mortgage payment each month thereafter. Monthly
plans allow a borrower to pay only 1 or 2 months worth of
premium at closing, and then on a monthly basis along with the regular mortgage payment.
Under a single premium plan, the entire premium covering several years is paid in a lump
sum at closing. Typically, homebuyers choose to add the
amount of the mortgage insurance premium to the loan amount. By doing this, homebuyers can
reduce their closing costs and increase their interest deduction |
Insurance Information
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