Lowering Your Payments...|
PMI premiums are added to, and collected through, your mortgage payment. It is insurance for your lender against your defaulting on the loan. Because PMI premiums are un-itemized, as to your overall monthly mortgage payment, you may not even be aware that you are paying the premiums.
To find out if you are paying PMI premiums, review your closing documents or subtract your principal, interest, taxes, and homeowners insurance from your total monthly mortgage payment. The difference will be what you are paying in PMI. A typical premium on a thirty year loan will range from about ½% to 1% of the initial amount borrowed per year. Ball park average is between $65.00 and $100.00 a month.
This may be a serious liability to you, if you are paying and have no legal obligation to pay. By keeping the policy in force, the lender can foreclose on your home quicker. Take the same amount of premium dollars and apply them to extra payments to principal and you will be paying the same amount you are paying now - but will own your home 6 to 8 years sooner, thereby saving you tens of thousands of dollars.
To find out if you qualify for lower monthly payments, go to Qualification Analysis .