Taxes, PMI, insurance, etc

[Skidmark]

FHA 30 year will be 1.35% of loan amount / 12.
FHA also has a 1.75% UFMIP (Up Front Mortgage Insurance Premium) which is financed into your loan amount as well.

Big change coming June 1st, if you do not put 10% down on FHA you will no longer be able to remove your PMI once you reach 78% loan to value.

If you have excellent credit and can put the extra 1.5% down, go conventional. The MI factor is .9X% and it is a removable charge once you get down to 78% loan to value.

I guess everyone wants a piece of the pie. Is MI similar to PMI? If I put 5% down on a FHA and conventional, is the difference in payment huge? Is the difference say in 10 years on the loan much different?

[AdamLX]

I guess everyone wants a piece of the pie. Is MI similar to PMI? If I put 5% down on a FHA and conventional, is the difference in payment huge? Is the difference say in 10 years on the loan much different?

MI is mortgage insurance on conventional loans.
PMI is private mortgage insurance on FHA loans.

The main difference is MI does have requirements for obtaining it, and credit score can affect the monthly MI cost. Example: you can get a conventional loan at 620 FICO, but cannot secure MI for the loan unless you have a 660 FICO (meaning you must put 20% down or raise your FICO). PMI is basically on all FHA loans, credit score doesn't affect it, it's the same across the board no matter your FICO. It does get slightly lower if you put 10% down, but so does the MI as well.

MI on conventional loans has several insurance companies to shop around. One example is Genworth. Your coverage is usually around 30% for the following form. This is essentially what we fill out to order your MI on a conventional loan.
http://mortgageinsurance.genworth.co...ateFinder.aspx


The big coming issue is that the PMI with FHA will no longer be able to be removed so you will pay it for the life of the loan.

MI on $150K loan amount is around $120 monthly.
PMI on $150K loan amount is around $169 monthly and will attached to the loan forever unless you lock your loan prior to the end of May.

[Vertnut]

And this is why PMI/MI pisses me off. For what you pay in monthly PMI, you could buy $30k-$40k more house.

[sc281]

Are there any quick and easy methods to estimating these to determine a house payment? I'm not FreightTrain rich, so I have to budget.

I'm trying to see what my payment may be.

Will this be sufficient?

House: ~150k
PMI: 1.35% / 12
Taxes: 3000 / 12
Insurance: 1000 / 12

+ principle and interest

Need the term.


Also use bankrate.com click calculator. It'll give you an ammortization calculator you can play with as well.

edit, someone already beat me to it with a zillow calc. Good luck on the purchase!

[Skidmark]

MI is mortgage insurance on conventional loans.
PMI is private mortgage insurance on FHA loans.

The main difference is MI does have requirements for obtaining it, and credit score can affect the monthly MI cost. Example: you can get a conventional loan at 620 FICO, but cannot secure MI for the loan unless you have a 660 FICO (meaning you must put 20% down or raise your FICO). PMI is basically on all FHA loans, credit score doesn't affect it, it's the same across the board no matter your FICO. It does get slightly lower if you put 10% down, but so does the MI as well.

MI on conventional loans has several insurance companies to shop around. One example is Genworth. Your coverage is usually around 30% for the following form. This is essentially what we fill out to order your MI on a conventional loan.
http://mortgageinsurance.genworth.co...ateFinder.aspx


The big coming issue is that the PMI with FHA will no longer be able to be removed so you will pay it for the life of the loan.

MI on $150K loan amount is around $120 monthly.
PMI on $150K loan amount is around $169 monthly and will attached to the loan forever unless you lock your loan prior to the end of May.

How the hell did they wing that anyways, that's about 30k extra for the term of the loan on a 150k home, in regards to the PMI not dropping at 78%.

I appreciate the good info. I may have to look into conventional, as I won't be ready that early.

And this is why PMI/MI pisses me off. For what you pay in monthly PMI, you could buy $30k-$40k more house.

Yea, super lame, though I suppose I only have to do it once to get started. Hopefully after enough years in the home and building equity, plus saving, i'd be able to put 20+% down on the next.

[DON SVO]

Damn, 3800/yr for Bedford on 150k.

My house is in Euless, so they share the same tax as Bedford, it's 2.51x.

[Skidmark]

My house is in Euless, so they share the same tax as Bedford, it's 2.51x.

Thank you sir. Congrats by the way!

[DON SVO]

Thank you sir. Congrats by the way!

Thanks man I'm pretty excited.

Might be willing to have a roommate!

[yellowstang]

Go by the old rule, expect to pay $1000 for every $100,000 borrowed!

[Vertnut]

Most buyers have no idea what PMI does/does not cover. If they did, most would be livid about paying for insurance that won't help them one bit should they default.

[The King]

Most buyers have no idea what PMI does/does not cover. If they did, most would be livid about paying for insurance that won't help them one bit should they default.

True, it's only there to protect the interests of the lender.

[DON SVO]

True, it's only there to protect the interests of the lender.

Yep. They make you pay to protect THEIR money. You default, you still owe.

[SVT Lurch]

That's why they call it "mortgage" insurance. If you don't like it/don't want to pay it, put 20% down - it's that simple. I tell that to all my borrowers, but most do not have the 20% available so it's either get the house now and pay the MI (still tax dedcutible like the interest) or wait another 10 years to save up the rest. Most 30 year notes WITH MI now still have an APR at or below 4.250%. You have to remember, you're applying for a loan of hundreds of thousands of dollars. Would you lend someone you didn't know that much money with that little equity without some sort of guarantee?

FHA is upping the premiums because every Tom, Dick, and Harry bought their first home in 2009-2010 when the first time buyer credit was active (and put the minimum 3.5% down). Fast forward a few years, and just like social security, the government underestimated the amount needed to collect to cover deficits/payouts so they have had to more than double the rates to cover themselves.

We had a client put the minimum down when they bought the house three years ago, refinance to a 15 year with single premium mortgage insurance, and after the refund of "unused" premium from FHA ended up paying less than 2% of the purchase price in mortgage insurance and now it's gone forever. My advice would be not to dismiss something "on principle" when it could be very beneficial in your situation. When used properly, every loan program has a benefit (even negative amortization option ARMs).

[talisman]

Thanks man I'm pretty excited.

Might be willing to have a roommate!

When do you close, anyway?

[8mpg]

I was just reading the new changes for FHA loan requirements for PMI coming in June. It is crazy. People will be holding it for minimum of 11 years now.

http://www.madisonmortgageloans.com/news-and-updates/fha-mortgage-insurance-changes/