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How to Calculate PMI [The Right Way!] - YouTube
Channel: Mortgage Education & Finance with Stephanie Weeks
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all those things go into this
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calculation how in the world are you
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going to know that
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if you don't have a loan officer and
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you're not in process and they don't
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have all your details
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you're not that's the point today's
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topic how to calculate pmi
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well my first response is you're
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probably not going to want to it's
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quite complicated but i'm still going to
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give you all the information
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by the end of this video you're going to
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understand the different types of pmi
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some of the ways that you can possibly
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calculate the pmi as well
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and understand all the variables that go
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into this
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based on the different loan programs
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stick around
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welcome to your one stop shop for
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anything and everything mortgage
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education
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i drop new videos every tuesday and
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saturday so be sure to hit the subscribe
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button and hit the bell to be notified
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every time i drop those new videos
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my name is stephanie weeks and i have
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helped thousands and thousands of
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customers with millions and millions and
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millions in mortgage financing
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and my goal here with this channel is to
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help you
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understand anything and everything that
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you can around mortgage
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education i've been a loan officer for
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over 17 years and i've been recognized
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in the top
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one percent in the country for loan
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originators as far as production
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thank you for tuning in there's pmi
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there's mip there's up front
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there's single there's upfront and
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monthly
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there's the 0.85 calculation the 0.35
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calculation the 0.50 calculation
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the 1 calculation the 1.75 have i lost
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you yet
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oh my gosh there are so many variables
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that go into
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mip and or pmi hang tight with me i'll
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try not to
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bore you to tears but i will give you
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information so that you at least
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understand what your options are and
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what goes into calculating mortgage
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insurance six
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i have broken this down into six
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categories to quickly discuss with you
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guys
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today so let's dive in number one
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mip versus pmi
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mip is mortgage insurance premium
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that's associated with government-backed
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loans
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such as va fha
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rd then there's pmi
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that pmi that is private
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mortgage insurance and that is on the
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private side
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that is for conventional loans those are
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those differences
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so when you hear those prados terms
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interchanged
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or on different loan types you hear them
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call different things that is the reason
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let's dive into number two when and
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where does the supply
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mip again that's mortgage insurance
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premium
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on an rd loan now not real
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often but these calculations and figures
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do change
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i'm giving you what they are as of now
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and i'm going to base everything
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for this video on purchases rule
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development
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mip you have an up front and you have
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a monthly you have your one percent
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upfront
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that goes into the loan unless you want
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to pay it in cash
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and it helps to continue funding the
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program
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and making it available there's staffing
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and a lot of expenses that go into
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keeping these programs alive and active
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so your mip you've got your upfront on
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rd
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you've got your monthly on rv the
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monthly is a 0.35 percent calculation
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i'm going to break out the calculator
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later so hang tight
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then we have fha another
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government-backed loan
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again that's called mip and you've got
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your up front as well and you've got
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your monthly
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i'm basing this off of a purchase with
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the minimum down payment
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you've got 1.75 up front and you've got
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your 0.85
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monthly calculation in that example next
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we have va
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va has no monthly but has an
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up front based on your eligibility and
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there's a scale
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and it could be as low as zero or
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complete
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exemption then we've got pmi again
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that's private mortgage insurance
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associated with conventional loans
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conventional
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you can have many options as far as
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what you want most people know and
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understand the monthly
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but in this video we're going to get
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into more information
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that when you know and understand
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there's actually more options
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than just the monthly so number three
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let's further dive in number three is
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let's talk about
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fha calculations i'm going to tell you
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how to calculate what this is going to
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cost you
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with a hundred thousand dollar loan
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amount remember i promised you
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or i said in the beginning you probably
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don't want to do this because it's
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complicated
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you want to do it the right way here's
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how we do it you have a hundred thousand
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dollar loan amount
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you have a 1.75 percent funding fee
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that's a an upfront funding fee or
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of 1 750
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to accurately calculate the
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monthly mip you're going to have to take
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1750
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because you're probably not going to pay
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that in cash you can but most people
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don't
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we're gonna add that to your hundred
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thousand dollar loan amount
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now we're dealing with a loan amount in
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this example
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of 101 750
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now we're going to figure out the
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monthly calculation
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we're going to take our loan amount 101
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750
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times 0.85 equals
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divided by 12 the decimals are going to
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be off because this is my cheating way
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to do it
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but that's 70 72
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and seven cents a month so 100 000
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loan amount fha purchase
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up front is 17.50 added to the loan
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amount
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to calculate your monthly of 7207 that
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is added into your monthly payment
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that is your fha mip cost and how to
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calculate that
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number four we're going to talk about
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the rd calculations now
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so we're going to use our same example
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purchase rule development 100
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000 loan amount we've got a hundred
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thousand dollar loan amount
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we have an upfront of one percent that
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equals
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one thousand dollars we're going to add
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that to our loan amount
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that way we can accurately calculate the
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monthly
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we have a loan amount of 101 even in
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this example
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times 0.35 monthly calculation
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divide that by 12. we have 29.46
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46 cents a month that is your monthly
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mip on an rd loan in this
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example and that's how you accurately
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calculate that as well
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number five are you still with me i'm on
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to number five
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we are going to calculate a conventional
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loan in this example
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here's what's so important and why i've
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told you you would probably not want to
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even
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attempt at this on a conventional loan
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you have so many options right now
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i'm going to talk to you about the
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monthly option and i'm going to give you
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an example in a calculation
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but but but but the rd
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and the fha those are what they are
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with the exception of certain situations
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such as more down payment
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things like that okay but they are what
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they are for the most part
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with conventional your pmi it's not just
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it is what it is
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it's based on your credit score your
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debt to income before
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the calculation of the mi your zip code
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goes into effect
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purchase versus refinance of course
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we're talking purchase today
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loan term right long term
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10 15 20 25 or 30 years also
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how many borrowers right that also makes
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a difference
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and loan amounts and i'm probably
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forgetting something as well but
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all those things go into this
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calculation how in the world are you
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going to know that
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if you don't have a loan officer and
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you're not in process and they don't
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have all your details
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you're not that's the point but let's
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assume you have all
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of the data we have a 100 000
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loan amount we're talking about pmi
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private mortgage insurance this is not
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an
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mip calculation 100 000 loan amount
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purchase and there's not going to be any
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up front
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right now we're talking monthly only so
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let's say if
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the calculation is a 0.47
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calculation so we've got 100 000
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times point seven percent calculation
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divide that by 12.
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we've got a monthly pmi that's added to
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your monthly payment
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for this example of 39.17
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17. and we're talking conventional
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so right now we're not talking up front
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five four three two one we're still
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there okay great oh hi great welcome to
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number six here we are
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there are so many options with pmi
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and a conventional loan there is
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you're upfront but that's called a
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single premium
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if you choose to pay the upfront you
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don't have the monthly
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remember the calculations we just did
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with rd and fha we had upfront and
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monthly well with conventional if you
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qualify
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you can actually choose single premium
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upfront
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one-time payment refundable or not will
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affect that pricing
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and if you do that then you have no
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monthly at all
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most people do not know that exists and
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in many situations
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that's my favorite option and will save
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you the most amount of money
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it is significantly re
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it is a significant reduction on the
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overall
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cost of mortgage insurance when you take
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that option
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and you can do that with as little as a
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three percent down payment so yes you
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can have a three percent down payment
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and there's a way to not have monthly
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pmi yes that is correct then you have
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your monthly which everybody knows about
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and we just did an example of a
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calculation of that
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we also have the other option which is
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called
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lender paid where you basically pay a
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higher interest rate
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yes for the life of the whole loan but
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you pay a higher interest rate and your
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lender basically pays the mortgage
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insurance
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for you i made a little cheat sheet for
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you
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and i'm going to put it as a link that
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you can download
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it's mip pmi ranges and like i said it's
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a little cheat sheet that i made for you
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guys
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that hopefully can help you have at
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least a general
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idea of everything we've gone through in
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this video today
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so i will put that in the bio and or the
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comments below
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click that and i hope it helps drop me a
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comment
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below hey drop me a comment
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below type yes in all caps
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if this video has helped you and you
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have a better idea of
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what the heck pmi is versus mip
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and an idea of what all that stuff means
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and how to calculate it
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yes y-e-s if you like this video please
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give me a thumbs up
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if you didn't give me a thumbs down be
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sure to leave a comment because i do
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appreciate the feedback
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and let's connect my insta is underscore
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the real stephanie weeks
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and i look forward to your comments as
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well as your direct messages
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have a great one guys and thanks again
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for tuning in
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check out these other videos for more
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information
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