Is there an upfront payment for PMI(Private Mortgage Insurance) due at closing?

Question

Hi, Is there an upfront fee for PMI that is due to at closing or is it only a monthly payment? If there is an upfront fee for PMI, how much is it? I live in California and looking into buying a house between 300 - 350 thousand. THank you!

Answer 1

It is usually quoted as a percentage that increases your monthly payment.  It could be 1/4 to 1/2%.  It is normally required when the down payment is below a certain percentage of about 20 to 25%.  The lender will usually not tell you when you have paid down the mortgage enough to request that it be terminated so you have to keep track yourself.  More lenders are now requiring it for the term of the loan.   Ask questions because all these kinds of fees can greatly increase your costs over the life of the loan.

Answer 2

my goodness, some of these answers are off.  The guidelines for determining PMI were changed effective 7/14/08 to a risk based model.  Now for a 30 year, you pay upfront, which can be anywhere from 1.25-2.25, depending on what your doing.  You will also pay a monthy charge, anywhere from .25-.75, again depending on program and risk.  The upfront is usually factored into your loan amount and can raise what you need to bring to closing.  What you need to toy with is can you make payments for a 15yr program, these do not have upfront PMI, but they do have the monthly.  Another factor in your decision is whether or not congress will pass legislation again allowing borrower's to write off pmi, it would seem logical that they would to entice home buying, thus if the law is passed, the around 4k that you would pay for upfront on a 30 yr could be written off, hope this helps

Answer 3

They may collect a couple of months upfront at closing. Each month you make a payment, they will deduct the cost of PMI.

At the end of the year, you can now take it as a tax deduction on your form 1040.