Find El Dorado Lowest Mortgage Home Loan Rates in California
Current Mortgage rates El Dorado CA
Product Rate
● 30 year fixed 3.66%
● 15 year fixed 2.94%
● 5/1 ARM 2.99%
Private Mortgage Insurance
In this Article, we are going to be studying about PMI and related queries in Eldorado CA.
What is PMI?
Different types of PMI?
Who is supposed to have PMI?
How much does mortgage insurance cost?
When is a borrower supposed to pay PMI premiums?
How long am I supposed to pay PMI?
Is there a way to avoid paying PMI?
When does mortgage insurance cease to exist?
What is PMI?
PMI is Private Mortgage Insurance. This type of mortgage insurance is charged to mortgage borrowers in case of a conventional loan. Where mortgage borrowers have less than 20% equity in their home in case of a conventional loan. A private mortgage is levied. This mortgage insurance is provided by mortgage insurance companies arranged by the lender or the bank.
Essentially in the event of borrowers default on mortgage payment the mortgage insurance company makes good an amount to the lender.
Mortgage insurance makes up for the portion of the monthly payment on the mortgage to the bank. Paying mortgage insurance is a burden because it is not applied towards the mortgage and hence builds no equity. It’s like an insurance policy where the borrower has to pay a monthly premium.
The advantage to the mortgage borrower is that it allows the borrower to buy a home even before he has built 20% as down payment.
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Different types of PMI?
IN case of conventional loans there are private insurance companies that extend the service of Private mortgage insurance to banks or lenders. So the word is Private Insurance Mortgage.
In case of FHA loan which is a government product. The term is called MIP or Mortgage Insurance Premium. This is managed internally as its a Government-backed loan, unlike the Private mortgage insurance.
Call El Dorado CA expert below to get you the lowest mortgage rate on your refinance.
How much does a mortgage insurance cost?
Conventional mortgage insurance rates vary. The lower the credit score, the lower the down payment on a mortgage the higher the premium. Traditionally speaking mortgage insurance ranges between $ 30 to $ 70 for every $ 100,000 of the loan balance. So if you have a mortgage balance of $ 200,000. You are looking at Private mortgage insurance of $ 140 a month.
In case of FHA loan. There are two kinds of Insurance fee. One is Upfront Mortgage Insurance fee which is a onetime fee and the other is monthly mortgage insurance fee.
Call El Dorado CA expert below to get you the lowest mortgage rate on your refinance.
When is the borrower supposed to pay a premium?
Typically the borrowers pay mortgage insurance along with their mortgage payment each month. Private mortgage insurance instead of being paid separately can be paid in a lump sum so that the borrower doesn’t have to pay mortgage insurance each month. A borrower will have to weigh these options with an expert as to which of the choices goes in favor of the mortgage borrower.
Call El Dorado CA expert below to get you the lowest mortgage rate on your refinance.
Why at all do I need a PMI Policy?
Paying private mortgage insurance is not the need of the borrower but the requirement of the bank or the lender. As long as 20% equity is not built in the home. The mortgage borrower will have to pay PMI as it protects the banks or the lender's fund in the event the borrower defaults on his house payments.
Call El Dorado CA expert below to get you the lowest mortgage rate on your refinances.
How long am I supposed to pay PMI?
In case of a conventional mortgage, a borrower has to continue paying PMI till the time he builds 20% equity in his house. In case of FHA loan. It’s almost until the time the borrower continues with the mortgage as it’s a Government product with a different set of guidelines.
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When does mortgage insurance cease to exist?
If you have a conventional mortgage and your principal balance is down enough that the equity on the home is 20% or the home value has gone up in prices. You need to refinance your home and come out of paying Private mortgage insurance.
If you have an FHA Loan. You need to switch your FHA to the conventional mortgage in order to come out of paying mortgage insurance as the FHA guidelines make it mandatory to pay mortgage insurance for the life of the mortgage.
For more information visit www.affordable-payment.com or call 323-705-3191 if you are a California Mortgage borrower. You can even email at roger@affordable-payment.com
Article by Roger Shanker
