Most lenders require the potential home buyer to purchase a separate insurance policy on the loan they take out. This is known as Puerto Rico, TX Mortgage Insurance. Mortgage Insurance in Puerto Rico, TX is designed to help lenders protect themselves in case the home buyer defaults on the loan. For the most part, lenders require mortgage insurance when the down payment is less than 20%.
There are different types of mortgage insurance available to potential home buyers, and is almost always paid for by the buyer. The home buyer can expect the cost of the insurance to range anywhere from $50- $200 a month. The most common type of insurance is known as a Puerto Rico, TX private mortgage insurance or PMI. This type of insurance is available and required on most Puerto Rico, TX conventional loans when the down payment is less than 20%. In addition, when a potential home buyer is applying for an FHA loan, mortgage insurance will be required as well. The only difference is that with an Puerto Rico, TX FHA home loan, the insurance will be attached to the monthly mortgage payment.
When acquiring Puerto Rico, TX Private Mortgage Insurance for a Puerto Rico, TX conventional loan, it usually costs about 1%-2% of the actual loan. The higher the loan amount the higher the PMI. For example, if the homeowner has a loan of $150,000 this could be broken down to $1,500 a year or $125 a month.
With an Puerto Rico, TX FHA loan, you will pay an upfront mortgage insurance premium in Puerto Rico, TX (MIP) of 1.75%. There is also an annual premium of 0.70% to 1.30%. However, the difference with these two types of loans is with an FHA loan, the PMI will be attached to the mortgage payment and with the conventional loan, PMI is a separate monthly statement.
Back before the housing market crash, the Puerto Rico, TX PMI premium would drop off after five years of having the loan. These days, Puerto Rico, TX mortgage insurance is required for the life time of the loan. Here are a few ways the PMI can be removed. One way is by refinancing and putting 20% down on the home. Another way the PMI can drop off of the loan is when at least 20% equity is built up. If the homeowner wants to go about dropping off the PMI, they will have to contact a lender and get a current appraisal on the home. This can cost anywhere from $350 to $500.
It is important to think of mortgage insurance in Puerto Rico, TX as a part of the Puerto Rico, TX home cost if the potential homeowner cannot afford to put 20% down on the home. Keep in mind the options of removing the policy when the time is right.