« « Private Mortgage Insurance: The Good, the Bad, and Good Riddance

What Mortgage Insurance Costs You?

Again, the mortgage industry is all about risk, and what determines your monthly premium is your down payment and your credit score. A 5 percent down payment carries more risk than a 10 or 15 percent down payment, so the mortgage will cost more. Likewise, good credit lowers the premium because a 750 credit score is less risky than a 680 score.

For example, the PMI on a $200,000 loan with 5 percent down might cost you $125 a month, while with 10 percent down the payment drops to $83. Putting 15 percent down drops the insurance payment ever further, to $50 a month. Of course, the best route is to put 20 percent down so you don’t have to carry PMI at all.

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