What is PMI? - Troy Bank & Trust Company, Inc

Private Mortgage Insurance helps you get the loan

Private Mortgage Insurance, also known as PMI, is a supplemental insurance policy you may be required to obtain in order to get a mortgage loan. PMI is provided by private (non-government) companies and is usually required when your loan-to-value ratio, which is the amount of your mortgage loan divided by the value of your home, is greater than 80 percent.

PMI is not a bad thing because it allows you to make a lower down payment and still qualify for a mortgage loan. In fact without PMI, many people would not be able to purchase their first home.

How is PMI calculated?

Your PMI premium is fixed based on plan type (loan-to-value ratio, loan type, loan term, etc.). PMI typically amounts to about one-half of one percent of your mortgage amount annually, according to the Mortgage Bankers Association, and the premium payment is usually rolled into your monthly mortgage payment. On a $200,000 mortgage, you may be paying $1,000 per year for PMI.

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Rates vary daily and are subject to change without notice.

All loans are subject to credit approval, verification, and collateral evaluation. Initial decision is subject to you meeting specific underwriting requirements and final approval will be based upon you satisfying those requirements. Loans originated by Troy Bank and Trust Company.

This information is provided for illustrative purposes only and does not constitute an application. This notice does not guarantee loan approval, nor is it an offer or commitment to make a loan to you on the above terms. The APR, fees, and closing costs are all estimates based on Troy Bank and Trust Companys normal and customary fees and typical tax and insurance costs in the stated property's vicinity.

Troy Bank & Trust Company, Inc (NMLS 409724) 1000 Hwy 231 S P. O. Box 967 Troy, AL 36081-3105

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