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article related to Mortgage
Insurance Premium: Are You Wasting Your
Money?
continued ....
This means that the monthly PMI
premium for a 7.50% fixed rate, 30-year
mortgage on a $200,000 home with 15% down
payment is $45. This does not include the
$1,189 you have to pay for the house
payment. For a home mortgage with 10% down
payment ($20,000), the monthly PMI payment
is slightly higher at $78 added to the
monthly house payment of $1,259. Finally,
the monthly PMI payment for a home taken
with 5% down payment ($10,000) is at $124,
with a monthly house mortgage of $1,329.
All PMI figures are limited to the first
20 years of payment. On the 21th year, the
PMI premiums decrease to $28, $30, and $32
for the 15%, 10%, and 5% down payments
respectively.
Interestingly, for the same loan with a
minimum down payment (20% or $40,000), the
monthly house payment is $1,119 without
PMI premium, interest, and PMI escrow,
while investing more on your equity.
Now,
are you wasting your money on mortgage
insurance premiums? Most believe that the
minimum down payment is the ideal
financial strategy as it completely
eliminates the need for mortgage insurance
while building on equity at the same time.
Sure, you will be paying more but the
truth of the matter is the answer to the
question, "Can you afford to pay the
minimum down payment?" If you can, then
why choose to pay less on down payment and
pay the PMI premium? Doing such is a waste
of money. But, if you cannot afford to pay
the 20% down payment and you want to own a
home right away be ready to pay more on
your monthly mortgage.
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More
information here about insurance
when building your own
house:
Insurance for Fire Only
In this present age of disasters and unforeseen events occurring, it is important to have a good, quality insurance plan. That is why insurance companies have policies that cover car damage, property, house insurance (fire only, robbery, etc.) personal self, and even life insurance. These insurance plans usually allow the owner to be less worried and concerned about damages to the car, property, or whatever it is he insures, including his own life, since there will be just and proper compensation for damages and/or losses. .......
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