How Are Private Mortgage Insurance Premiums Set?
August 28th, 2008 By Peter G. Miller
MI rates are based several factors.
- • The percentage down. The more down, the lower the premium (because there’s less risk).
- • Whether the loan is fixed or adjustable. ARMs are seen as more risky than fixed-rate loans, so rate for adjustable loan products are higher than fixed-rate mortgages.
- • Lump sum or monthly payments. Some MI policies can be paid up front, most are paid on a monthly basis.
- • Whether any portion of fee is refundable. With refundable policies, the cost is higher, but in certain circumstances a portion of the fee can be refunded.
- • Whether the loan is fixed or adjustable. ARMs are seen as more risky than fixed-rate loans, so rate for adjustable loan products are higher than fixed-rate mortgages.
For additional information, go to PrivateMI.com.
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