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Terry Said:

how much will be a PMI Mortgage Insurance for a 200000 house?

We Answered:

The rate varies with your credit score, the term and type of loan you have and the mortgage insurance company. If you have a credit score of at least 720 and a 30 year fixed rate term, the monthly PMI through MGIC will be $106.08 to purchase a home with a $190K loan. The monthly PMI payment stops once your balance is paid down to 78% of the original purchase price after about nine years of regular payments or sooner if you pay more. They also offer a one time payment of 2.48% ($4,712) of your loan financed with the balance which gives you a lower initial total payment, but won't change when you pay down to 78% of original value.

Rates are different for refinances, shorter loan terms, adjustable rates and other special programs.

Robert Said:

How can I get around paying PMI (primary mortgage insurance) on a new house and still get a good loan rate?

We Answered:

You're right, PMI (Private Mortgage Insurance) is required on "conventionally" financed loans where the LTV (loan to value) is greater than 80%. One option is to get "piggy back loans" that way you avoid the PMI charge and the other is to simply accept the additional insurance.

I'm not a big fan of taking the Piggy Back option, because, as you stated, you pay a premium rate for 2nd mortages. PMI is ONLY mandatory for the first two years. If after the two year period your loan to value ratio falls below (in most cases) 80% loan to value, you can petition the morgage company (with a formal appraisal) to have the cost eliminated. With a second mortgage you cannot erase the costs of future interest without paying the expense to refinance all loans which can result in thousands more in costs.

In your situation I would advise against taking a piggy back loan. PMI is calculated by risk levels; the lower your down payment, the higher premium of PMI. Since your LTV will be very close to 80%, your PMI factor should be close to .15% to .22%. This translates a monthly cost of roughly $25.00. While this is not tax deductible, it will be significantly less than the interest (and maybe the cost of refinancing later) on a 2nd mortgage. Piggy Back loans are good if and only if you have a very high loan to value and you need the additional tax write-off.

Insofar as your first mortgage is concerned, the rate and/or costs will NOT be influenced by whether you have one or two loans. If you're being told this, find another broker!

Another note: If you plan on shopping around, do NOT release your social security number: each time someone pulls your credit, your credit risk score increases which will increase your costs. Just verbally give them your credit score.