Newbie with question about PMI

[nativenyer]

What is PMI?  How do you get it?  Where should you go to get?  Any info about PMI I would appreciate.

[CAnNY]

It's Private Mortgage Insurance. It is based on your loan amount. You can find it out by searching PMI calculators. If you go FHA then it will be added to the life of your loan. for like a 100k loan PMI is like $125.00 or so. It's one of the components that make up your mortgage payment. If you go conventional you won't have PMI for the life of the loan. In fact I believe if you put 20% down you avoid PMI altogether making a less expensive mortgage when you go conventional. 

Im sure others who are more knowledgable will chime in with additional info. 

[ShanetheMortgageMan]

Are you financing in NY?  NY has slightly different laws regarding PMI than other states do.   But in general...

PMI is an abbreviation for private mortgage insurance.  It gives the lender additional protection (insurance) on high risk loans (loans with lower down payments).

PMI is imposed (not by law) on conventional 1st mortgage loans with your loan-to-value exceeds 80%.  Loan-to-value is the percentage of your loan balance vs. the value of the home used by the lender.  On a purchase transaction it's the lower of the purchase price or appraised value (except in NY, then it's always the appraised value).  On a refinance the value it's the appraised value. 

PMI is provided by PMI companies (Radian, MGIC, Genworth to name a few).  Each lender is set up with several (or more) PMI companies to insure their mortgages when needed.  Most lenders don't let consumers choose their own PMI company, but it can be possible.  Usually lenders will choose the PMI company who has the lowest PMI premiums.  The PMI premiums are paid by you, the consumer.

The most common type of PMI is paid on a monthly basis, called monthly PMI.  The less common form is a 1 time premium  (also known as "single premium") you pay at closing, then you never have to pay the monthly amount... the 1 time premium is usually equivalent to 2-3 years worth of the monthly PMI.  Yet an even less common form (but it's popularity has increased in 2014) is called split level PMI, where you pay a small 1 time premium at closing + a small monthly amount of PMI.  The amount of the premium is determined by your loan characteristics, including your credit score, loan amount, and loan-to-value.  http://www.radian.biz/sfc/servlet.shepherd/version/download/068C0000001fyLMIAY is a good chart (rate card) for monthly PMI & single premium.

PMI companies all have their own guidelines, but for the most part they are very similar to one another with very small variations.  That would be a reason that one PMI company is chosen over another, because there is something about the loan that precludes it from meeting the guidelines of a particular PMI company.  http://www.radian.biz/page?name=RatesAndGuidelinesNew links to a variety of their own guidelines, eligibility matrices, and rate cards.

The primary PMI companies that lenders use are:

United Guaranty - https://www.ugcorp.com/services/guidelines.html

Essent - http://essent.us/index.php/home/lenders/rates-and-guidelines/

Genworth - http://mortgageinsurance.genworth.com/RatesAndGuidelines/Guidelines.aspx

MGIC - http://www.mgic.com/underwriting/index.html

[nativenyer]

Thanks so much for all of the info.  I'm buying in SC.  I'm trying to get as much info as possible so I know what I'm doing and what to expect in the loan app process.