Last year, I purchased a home for 100,000 with an interest rate of 6.75% My PMI is $348.33. It seems like I am paying too much for PMI because I only pay $69 per month on a new house purchased for $171,000 @ 5.5%. If I am paying too much, can I get this changed?

Thank you for your time,

TIE J

Well, we would need to know the amount of your loan, first. Generally, I've seen PMI around 0.5% of the original loan amount, annually (it varies based on the LTV ratio). So, if you borrowed $90,000 on that $100,000 home purchase, I would have expected a PMI payment of $450, annually. The $69 per month sounds reasonable on the $171,000 house, assuming a 90% loan.

The original loan amount was 100,000. Is it at all possible for me to call the bank and see if this can be changed. Are there any laws on how much a bank can charge you for PMI. It seems like the amount they charged me is a rip off amount.

Thank you,

TIE J

Even if you financed 100% I don't think you're PMI would get anywhere close to $348. I bought my house for $105,000 and financed $91,000 (86% LTV) and my PMI was $50/mo. before I refinanced.

Sometimes you can get your house reappraised and if the appraisal value comes in high enough, the bank will lower or drop your PMI. The last bank I had my home loan through told me they would only use the purchase price, so I paid the $1000 and refinanced elsewhere. I planned to stay there a few more years so the refinance paid off.

You say your PMI is $348.33.
Is that annual?
If so you're paying $29 per month for PMI. Don't feel too bad. I've got a $100K mortgage note and I'm paying $79/mo.
Was the PMI not disclosed in your mortgage papers? Mine was in nice big letters on the papers I got prior to closing.

i PAY $348.3 a month!!!! This was in my closing papers but I thought they charged me this because of my credit. But as I researched online, it is not based on how good or bad your credit is. Can anyone tell me whether this is illegal to charge someone this hight amount for PMI?

Thank you,

TIE J

Not illegal to my knowledge. Call your loan officer and get an explanation. Right, wrong or indifferent, he or she will be able to tell you why you're getting charged so much. That PMI payment seems huge though unless there are some extenuating circumstances.

Yeah, that PMI sounds incredibly high if it is monthly - are you certain that you are paying it every month, that you aren't misinterpreting your statement?

I don't know of any limitations on PMI, however, if you're actually paying that, your APR would have been pretty massive - you might check that they included PMI premiums as a finance charge on your TIL disclosures. You might also ask the bank how it calculated your PMI payment and for documentation from the provider that the premium is actually $348/mo.

For what it's worth, on a 100% LTV (no down-payment) loan, our premium comes out at just under 1% annually, which would be about $80/mo. on a $100,000 loan (for a $100,000 purchase).

So if I have a friend with a $170k mortgage at 6.5%, $400/ month PMI is probably too much and he should contact his lender?

Is this JUST for pmi or for all escrows including taxes and insurance? If you're escrowing for pmi, you have to escrow for taxes and insurance too.