Is there a mortgage insurance premium charge at closing for conventional loans?
I know there is a mortgage insurance premium around 1.5% when you close on a FHA loan, but I was wondering if the same charge apply when you close on a conventional loan
- Anonymous1 decade agoFavorite Answer
AT closing, generally no. I say "generally" because there used to be something called prepaid mortgage insurance for conventional loans - rarely used. But I do not think the product exists any longer. I haven't heard about it in years.
In the absence of that, you only pay conventional mortgage insurance each month as part of your mortgage payment.
Good luck.Source(s): Finance and Mortgage Consultant since 1978 http://newjerseymortgageblog.com/what-is-mortgage-...
- Equality 7-2521Lv 71 decade ago
Yes, if you pay less than 20% down on a conventional loan you will pay a PMI premium each month. There are some very infrequent exceptions to this, so you can probably count on it.
Make sure your closing documents include the provision somewhere that once your LTV ratio reaches 80% (either through your principal reduction over time, or an increase in the appraised value of your property), you can request that the PMI be cancelled. That will save you each month.
- Anonymous1 decade ago
No, there is not a mortgage insurance premium on conventional loans at closing but you will pay monthly mortgage insurance.Source(s): I'm a mortgage banker/broker
- chatsplasLv 71 decade ago
SURE, UNLESS you put down 20%, you have to pay PMI because you're a poorer risk.Source(s): real estate investor
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- AlterfemegoLv 71 decade ago
Yes if you don't put down 20%.