How Do I Calculate Mortgage Insurance On A Conventional Loan?

Calculating monthly mortgage insurance on a conventional loan is best handled directly with the mortgage company whom you’re hiring to do your purchase preapproval and/or refinance loan with. However, to have a general understanding of how mortgage insurance works, know that it is required for any loan with less than 20% down.

Plan on on using a calculation of approximately 70 basis points or rather .70% of the loan amount. Using a loan for $300,000-that equates to $2100 per year, divided by 12 representing 12 months would equal approximately $175 per month. 70 basis points would be about right if your credit score is 700 or higher. If your credit score is under 700 plan on using a factor of 90 basis points. Same math applies on how to compute the monthly mortgage insurance payment.

When comparing the conventional loan to an FHA loan in almost every circumstance the conventional loan does contain lower monthly mortgage insurance. Talk to a qualified mortgage professional about what loan program makes sense given the down payment factor as well as the long-term payment affordability.

Looking to get an accurate quote for Conventional or FHA Mortgage? Look no further, start now by receiving a complimentary mortgage rate quote.

Posted in:

RELATED MORTGAGE ADVICE FROM SCOTT SHELDON

Smiling man holding a "Mortgage Approved" sign in front of a modern home and a DSCR loan presentation board showing rental income exceeding mortgage payments.

How to Buy a Home Without a Job Using a Rental Property Loan Strategy

If you’ve got solid credit and a decent amount of cash on hand—but no W2…

Here's a strategy to buy a home and set up a future refinance

Here’s a strategy to buy a home and set up a future refinance

For families looking to purchase a home, good news has arrived interest rates are slowly…

How your financial experience might hinder your ability to get a mortgage loa

How your financial experience might hinder your ability to get a mortgage loan

Getting a loan to buy a home is a maze of questions, examinations, along with…

Here’s how to buy a house even if you think your income may not qualify

Here’s how to buy a house even if you think your income may not qualify

If you’re looking to get prequalified to buy a home, one of the main elements,…

View More from The Mortgage Files:

4 Comments

  1. […] you’re going to buy shows you have 10% equity, you could qualify for the lender to pick up the monthly mortgage insurance payments, aptly called Lender Paid Mortgage Insurance. (This can also be done if you’ve […]



  2. […] you’re going to buy shows you have 10% equity, you could qualify for the lender to pick up the monthly mortgage insurance payments, aptly called Lender Paid Mortgage […]



  3. […] you’re going to buy shows you have 10% equity, you could qualify for the lender to pick up the monthly mortgage insurance payments, aptly called Lender Paid Mortgage […]



  4. […] main driver of mortgage insurance cost is your credit score. The higher the score, the lower the percentage of mortgage insurance associated with your mortgage payment when opting a conventional loan program (meaning non FHA/VA […]



begin your mortgage journey with sonoma county mortgages

Let us make your mortgage experience easy. Trust our expertise to get you your best mortgage rate. Click below to start turning your home dreams into reality today!