Calculating PMI with the help of loan mortgage calculators
June 10th, 2010 - By admin - Posted in Loans MortgagesThe borrowers have to purchase private mortgage insurance (PMI) when they are unable to make at least 20% down payment on a home loan. This implies that they have to pay mortgage insurance premiums in a year. A first time homebuyer can calculate the mortgage insurance premium with the help of a loan mortgage calculator easily. Thereby, he can know whether he can afford to pay the insurance premiums.
How to calculate mortgage insurance premiums
A loan mortgage calculator can help you to figure out the amount of money that you have to pay for private mortgage insurance premiums. A loan mortgage calculator also helps you to calculate the overall payment that you have to make on the home loan.
For example: Suppose you are buying a home for about $300,000 and making a 8% downpayment ($24,000) on a 30 year Fixed Rate Loan. The rate of interest is around 0.78%. You are financing around 92% of the purchase price which is $276,000. You can calculate private mortgage insurance premium by making the following calculation: i) $276,000 x 0.0078 = $2,152.80 ii) $2,152.80 รท 12 months = $179.40. $179.40 is your monthly private mortgage insurance premium.
You have to pay this insurance premium on top of the mortgage interest each month. You can calculate the total amount of money that you have to pay each month with the help of a loan mortgage calculator without any difficulty.
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