A Mortgage Calculator with PMI and Why You Need It!

If you have been considering either purchasing a home or you already own a home but have some concerns about your private mortgage insurance, a good PMI calculator can come in handy.

A mortgage calculator with pmi can help you determine both how much money you may be required to add on to your mortgage every month as a result of private mortgage insurance as well as when you can expect to drop it.

Private mortgage insurance, often referred to as simply pmi, is one of the costs that many people overlook when they first begin to consider purchasing a home. But if you take advantage of the assistance offered from a PMI calculator, it won’t be any surprise at all.

Basically, private mortgage insurance is a type of insurance that can help protect the risk of the investor or banker in the event that you, as the homeowner, are unable to make the mortgage and the home must be foreclosed upon.

If you purchase a home with a down payment that is less than 20% of the home’s purchase price, you may well be required to pay for PMI.

If you are considering the purchase of a home, a mortgage calculator with PMI can come in handy in understanding how PMI can affect the amount of your mortgage.

The cost of your monthly PMI will depend on two things:

• the amount of your mortgage
• the amount of your down payment.

In order for a mortgage calculator with pmi to work correctly in this scenario, you’ll need to have some information handy. For example, you will need to know:

• The sale price of the home
• Down payment (in terms of percentage)

• The length of mortgage (in terms of years)

Annual interest rate.

That is only the monthly mortgage payment, however. That does not take private mortgage insurance into consideration.

Using a mortgage calculator you could enter the same data and discover that taking PMI into consideration, your monthly mortgage would now be $1236.72.

Example #2
Another situation in which you would want to use a mortgage calculator with pmi would be if you already have a mortgage and want to know how long it will be before you are no longer subject to private mortgage insurance.

As demonstrated with the calculations from a mortgage calculator above, removing private mortgage insurance from your mortgage can make a difference in the amount of money you pay every month.

You could also use a mortgage calculator with pmi to determine the length of time that you are required to pay private mortgage insurance.

This will usually depend on how long it takes you to build up a sufficient amount of equity in the home.

In some cases, the lender may make a provision within your mortgage stating that private mortgage insurance can be dropped after a certain amount of time.

Under federal law; however you can drop the pmi once you have 20% equity built into the home. See the link below for further explaination.

Federal Law and PMI

This can happen by either the home rising in value or by your making enough payments to equal 20% equity.

In this scenario, you could use a mortgage calculator with pmi to determine both the amount of money you would need to have paid into the mortgage and the amount that you have paid into the mortgage.

A New Loan with No PMI 

There is a way not to pay PMI altogether; whether you purchase or have an existing mortgage with PMI. It's called an 80/20 loan. This option could substantially lower your monthly mortgage payment. Go to 80/20 Mortgage Calculator to find out the details!

Similar to the first example, you’ll need to have specific information handy to obtain correct figures from a mortgage calculator with pmi.

• Loan amount
• Interest rate
• Term of the loan
• Number of payments made to date