What is PMI?

Today we’re going to talk about PMI or private mortgage insurance. When you as a home buyer make a down payment that is less than 20% you are going to be required to purchase private mortgage insurance if you are doing a conventional style loan. This private mortgage insurance or PMI protects the lender in case a foreclosure happens. The cost of PMI is usually between 0.3 and 1.5% of your original loan amount per year. That number does vary based on the size of your down payment and your credit score. On some loans, the PMI doesn’t stay around forever, as on some loans it will cancel so you don’t have to refi-out.

There are four types of mortgage insurance that I’ll go over really quickly.

The first is monthly, which most of you probably know about. It’s a premium that’s included in your monthly mortgage payment. Once you paid your mortgage down to 80% of the original sales price. With conventional financing, you can call to request that it be removed, but as 78% of the original loan amount and purchase price, the mortgage insurance will automatically cancel.

The next is single premium mortgage insurance, which is when you buy out the monthly premium with a flat fee. This is paid as a closing cost, eliminating the need for any kind of monthly mortgage insurance. Depending on your down payment, the premium may be able to be financed into your home loan as well instead of paid in cash at closing.

Then there’s split mortgage insurance, which is a little bit of monthly and a little bit of single premium. You can pay a certain percentage upfront and this will reduce your monthly mortgage insurance payment. So it’s a really great option if you can, uh, put this together this way.

The fourth option is lender paid mortgage insurance, which is when the mortgage insurance premium is paid by the lender and it’s built into an interest rate. And even though it sounds like your payment will be higher, it actually can produce a lower monthly payment because you’re not having this single amount of mortgage insurance included in the payment.

If you have questions, let me know.

Who Touches Your Mortgage Loan File

In today’s post, we’re covering who actually works with you on your loan file. This will vary from company to company and from originator to originator. At Movement and with Team Springer, this is how we work with you on your loan file during the process, so that way you always know who’s touching your file.

The first person who you work with is obviously going to be me, I’m your Loan Officer and I help guide you through the process of picking your loan product, your interest rate, your down payment, the structuring of your loan, and other aspects. I’ll go over the process with you from start to finish so you’re comfortable on how everything works and what is expected from you.

The next person who steps into the picture with me is Jill and she’s an Administrative Assistant here at the Vancouver office with me. Jill’s role is to:

  • Support you, the consumer, with your loan file.
  • Help you with making sure your documents are accurate and correct.
  • Order all the supporting documentation from verifications and title work appraisal and everything like that.
  • Work with Theresa on the file to get it to underwriting.

Once your loan file goes through underwriting, Brenda, who is my rock star Processor and has been in the business a long time, jumps into the picture. Brenda’s role is to:

  • Takes the file from underwriting to funding and closing. What that means is once the underwriter’s reviewed your file, they may add some conditions, or they may have some clarifications. Brenda takes that input from underwriting and contacts you to get the information and answers back to them.
  • When we’re clear to close, she works with the closing department to make sure the loan documents are issued, the closing disclosure has already been signed and we’re ready to go.

Because we actually use Easy Sign, you sign the vast majority of your loan documents in your closing package online and you are pretty much signing just a little teeny tiny stack at actual closing. Everything goes much more quickly.

So that’s the team and our process here at Movement, and I hope you look forward to working with them because I have some great support staff and Brenda and Jill are amazing. Not every loan company has teams like this to support their Loan Officers. Other loan officers and mortgage companies work very differently and may not want the contact directly with you, the consumer. I prefer it because I like to be involved throughout the process.

If you have questions, let me know.