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This mortgage calculator can be used to figure out monthly payments of a home mortgage loan, based on the home's sale price, the term of the loan desired, buyer's down payment percentage, and the loan's interest rate. This calculator factors in PMI (Private Mortgage Insurance) for loans where less than 20% is put as a down payment. Also taken into consideration are the town property taxes, and their effect on the total monthly mortgage payment.
Avoiding PMI The easiest way to avoid PMI is to make a cash down
payment of 20% or more. Potential sources of additional cash
include:
Borrowing against your 401(k) retirement plan Taking a margin
loan against your stock Asking relatives for a gift Refinancing
your car and taking cash out Selling your car, jewelry, etc. In
the event you are unable to make a 20% cash down payment,
consider these options:
Piggy Back Loan: A piggy back loan usually allows you to avoid
PMI even though you are making a down payment of less than 20
percent. The most common piggy back loan combinations are:
80-10-10: Eighty percent first loan, 10 percent second (piggy
back) loan, 10 percent cash down payment. 80-15-5: Eighty
percent first loan, 15 percent second loan, 5 percent cash down
payment. 80-20: Eighty percent first loan, 20 percent second
loan, no cash down payment.
Even though the second loan rate may be higher than the first
loan rate, you usually come out ahead since you don't have to
pay PMI. Also, the interest on the second mortgage will likely
be fully tax-deductible.
Lender Paid PMI (LPMI): In this case, the lender makes your PMI
payment for you, but charges you a higher rate on the loan.
Since the PMI payment is not tax deductible, and the higher rate
results in a higher, tax-deductible interest payment, in the
short-run you may save money by choosing LPMI over the
conventional PMI option. The disadvantage is you're stuck with
the higher interest rate for the life of the loan. If you had
paid PMI, you could cancel it when you achieved 20% equity in
your property.
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M & M Resources Unlimited, Inc.
Helping customers since 1986
1577 Ridge Road West, Suite 119 - Rochester, NY 14615 Office:
(585) 865-0950 Fax: (585) 865-3202 Toll Free: 1-800-937-2350
Licensed Mortgage Banker/NYS Banking Department
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