What would you consider when determining whether to pay for the private mortgage insurance monthly or up-front?

Your loan officer can run different scenarios for you, to see what the costs are for each. It also
depends on the loan, if you are doing a refi or a purchase. If you are doing a
purchase, and you will receive seller help, you can use the seller help to pay
for the MI upfront. Up front MI, is called single-premium mortgage insurance.
The total amount due is based on the LTV and credit score. Once you pay the
single premium, you get rid of it, once and for all. In a refi, you can roll in
the cost for the single premium, as part of the new loan.

 

MI companies price out the different options using the type of property it is, credit score and 5%
intervals of the loan to value. Ex., 95% loan to value is riskier than a 90%
loan to value, all the way down to 80%. At 80% you do not need MI.

Monthly MI may be your option, if the single premium is too high.

Now, some MI companies have come out with what they call The Hybrid option. It is a
combination of single premium and monthly payments. You can pay part of the
single premium, to have a smaller monthly MI payment.

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