What impacts my PMI?
Can you give me examples of what impacts my PMI or mortgage insurance rates? And, does my credit score impact my PMI rate?
I will give you a couple of examples relating to PMI rates at various FICO scores. Keep in mind that there are many variables that can affect your PMI rates in addition to FICO scores:
1.Down payment (a lower down payment will increase the PMI rate you are required to pay).
2.Type of loan (an ARM will typically have a higher PMI rate than a fixed mortgage, a second home will have a higher rate than a primary residence, etc.).
3.The amount of insurance coverage (expressed as a percentage of the loan balance).
To keep things consistent, I’ll give you an example of a $210,000 house/primary residence. The buyer has put 5% down, leaving ~$200,000 in an adjustable rate mortgage. The PMI coverage is 25%.
The approximate rates at the following FICO scores would be:
620+, 0.77% ($128 per month)
600-619, 1.47% ($245 per month)
575-599, 2% ($333 per month)
A pretty big difference!
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