Mortgage Insurance

San Rafael Place, FL Mortgage Insurance

Mortgage insurance in San Rafael Place, FL may be required on your loan as a form of protection for your lender, covering them against losses if you default on your mortgage. When a San Rafael Place, FL borrower defaults and the lender takes title on the property, mortgage insurance helps reduce their costs. This type of insurance is typically required on conventional loans with down payments under 20%.

There are actually two main types of mortgage insurance in San Rafael Place, FL, depending on the type of loan you get. If you get a conventional mortgage with a down payment of 19% or less, you will likely need to pay private mortgage insurance (PMI). FHA loans have a unique type of insurance that comes in the form of a one-time upfront premium and an annual premium, which are both required on all FHA mortgages.

As the borrower, you can expect a monthly cost of $50 to $200 per month when you are required to carry mortgage insurance.

Mortgage Insurance Protection in San Rafael Place, FL

When Mortgage Insurance is Required in San Rafael Place, FL

If you are getting a conventional loan in San Rafael Place, FL with a loan-to-value ratio of more than 80%, which means a down payment of less than 20%, private mortgage insurance will almost always be required. This PMI may also be necessary if you have poor credit or you are viewed as high risk.

All FHA loans, on the other hand, require mortgage insurance, no matter the size of your down payment. A qualified veteran can obtain a VA loan in San Rafael Place, FL with no PMI ever.

Cost of Mortgage Insurance in San Rafael Place, FL

Private mortgage insurance in San Rafael Place, FL is usually 1-2% of your loan, which works out to $1,500 annually ($125/month) for a $150,000 mortgage. The higher your LTV, the higher your PMI.

An FHA loan requires an upfront mortgage insurance premium, or MIP, of 1.75%, with an annual premium between 0.70% and 1.30%.

Private Mortgage Insurance in San Rafael Place, FL

How to Get Rid of San Rafael Place, FL Mortgage Insurance

If you must pay private mortgage insurance, it is fairly easy to get rid of it if you reach 20% equity. You will need to reach 20% equity in your property through home appreciation (which requires an appraisal that you must pay for) or paying down your loan. San Rafael Place, FL lenders are required to cancel PMI when your balance reaches 78% loan to value.

FHA mortgage insurance premiums in San Rafael Place, FL, however, are for the life of your loan. In the past, you could get these premiums dropped off after 5 years or hitting a certain loan to value ratio, but the only way to get rid of it now is refinancing into another type of loan.

Upfront Premium in San Rafael Place, FL

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