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Pre-paying Mortgage Insurance Upfront Cost

Hello,

I am currently in the process of buying a single family home priced at $425k in Chantilly VA. I wanted to prepay the mortgage insurance upfront as a single payment. How much would this cost? I am just looking for a ball park figure. Is there a website that I can use to get quotes for this?

Thanks!
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July 07 2011 - Chantilly
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Answers (10)

@ Joe, using a 30 Yr Fixed and a score of 745 the charge would be aprx 1.29% of the loan amount, or $4353 in your case.If a score of 705 then the charge is aprx 2.18% of the loan amount or $7357 so you can see what a difference score makes. It doesn't make any impact on the P & I if you are paying the fee with cash or paying from a Seller Concession. If you want to use a Lender Credit then that will affect the P & I because you will move the rate up to cover. How much of a rate move up depends on the Lenders premium pricing, you may only see the rate go up .125 if you have a high score, or .250 - .375 higher rate if lower score.
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August 07
@ Joe, the other 2 factors besides down payment % to determine the charge are your credit score  and the loan term like 30 Yr, 20 Yr, 15 Year Fixed or an Arm?
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August 07
Profile picture for tegenaw2003
What could be the amount of the upfront Mortgage Insurance Premium for a purchase price of $375K and 10% down payment conventional Loan? What impact could this have on the P & I ?

Thanks for your response

Joe
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August 07
hi ajosh...

I have tried to answer your question 7 or 8 times, apparently, Zillow now blocks any live links as content for answers, welcome to Big Brother.

Do a search for [Websites removed by Zillow moderator. Please see our  Good Neighbor Policy.]
Happy to answer any other questions, we are just off Sullyfield Circle...
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July 07 2011
In Fairfax, FHA is going to be your best bet for 5% down (can do as little as 3.5% down with FHA with no change other than the slight increase in payment for the larger loan amount).   In that case your up front MI is going to be 1% of the loan amount.   Ask your lender what the difference is in the rate if he covers that for you in the rate and then compare that to paying it up front, out of pocket.   That said, with FHA you will still have monthly PMI for at least the first five years. 

If you are looking to buy out the MI entirely, then you need to go with a "conforming" loan and ask for "SINGLE PREMIUM MI."   And again compare your options for paying it out of pocket and paying it via the interest rate.   The question to ask yourself is, "how long into the loan is the break even point?"   However, MI from the conforming channels can be a bit challenging to even get when you're only putting 5% down (FHA MI is different).  The MI companies are much more comfortable with 10% down.  But, assuming you can get it, that's another way to skin that cat.  Feel free to contact me for clarification. 
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July 07 2011
it can be anywhere from 1.95% of the loan amount to about 2.4% depending on the MI provider your loan officer uses.
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July 07 2011
I would estimate that at a cost of about 2.25 points or raise the rate about .375 to cover it.
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July 07 2011
Profile picture for ajosh
Thank you for your replies. I was thinking of putting 5% down. I have excellent credit. What kind of number would I be looking at?
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July 07 2011
If you are doing an FHA loan, it will be 1% of the base loan amount,

with a $425,000 sales price and assuming a 3.5% down payment... your base loan amount will be $410,125. So the Up Front Mortgage Insurance Premium would be $4101.25. 

This can be added to the loan amount and financed   OR   you can pay it in cash with the rest of your closing costs and down payment.

If this will be any other type of loan, it will depend on several factors (amount of down payment, credit scores, etc...)
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July 07 2011
Depends on how much you are putting down and how good your FICO scores are.
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July 07 2011
 
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