Borrowers selecting loans that exceed 80% of the property value may be faced with three issues related to private mortgage insurance, two at the time the loan is originated, and one some years down the road. later on decide whether they want to purchase mortgage insurance as opposed to other options. If they opt for mortgage insurance, they may have a choice of premium plans, and if they select a monthly premium, they will want to know how long they will have to pay it.
The first issue faced by the borrower who can only make a small down payment is whether to purchase private mortgage insurance, pay a higher interest rate, or take a first mortgage for 80% and a higher-rate second (“piggyback”) for the remainder. For background, read Pros and Cons: Mortgage Insurance Versus Higher Rate.
Less-Than-20% Down Calculator: Mortgage Insurance Versus Higher Rate Versus Piggyback
This calculator compares the costs of PMI with that of the two alternatives.
The second issue faced by those who chose mortgage insurance over the alternatives is to decide which of three mortgage insurance premium options they should select. This is discussed in Mortgage Insurance In the Post-Crisis Market: Do You Know Your Options?
Mortgage Insurance Calculator: Comparing Options.
This calculator compares the costs of alternative premium plans.
An issue faced by borrowers who select the monthly premium plan is to determine how and when to get the mortgage insurer to terminate the policy. This is discussed in Cancelling Private Mortgage Insurance (2).
Mortgage Insurance Calculator: Period to Termination.
This calculator allows the borrower to estimate when a monthly premium policy can be terminated.