When are mortgage insurance premiums real expensive?
Long term Option ARMs with less than 5% down payment will require 1.20% annual rate paid monthly. Option ARMs allow negative amortization and are considered high risk. Therefore, they will ask for the highest mortgage insurance premiums. Short term fixed rate mortgages with 15% down payment and higher can ask for as little as 0.19% annual mortgage insurance charge. Additionally, mortgage insurance premiums are higher on second homes, investment properties, mobile homes and cash-out refinances. They also depend on credit score rating of the loan applicant.
