How to calculate loan to value on your Wisconsin mortgage for monthly mortgage insurance.

How to calculate loan to value on your Wisconsin mortgage for monthly mortgage insurance.



Hi, I am Ron Meyer a mortgage loan consultant with GSF Mortgage.

Today I am going to be talking about mortgage insurance or pmi. If you are putting less than 20% down on a home purchase, your lender will require you to carry mortgage insurance.

A common question I get from buyers who are purchasing a home is how do I calculate the loan to value ratio to determine if I will need pmi? Can I go off of appraised value to calculate loan to value or do I need to use the purchase price? For loan to value ratios greater than 80%, you are required to carry mortgage insurance.

Let’s use the following purchase transaction example of
Purchase Price $100,000
Loan amount $90,000 putting $10,000 down
Appraised value $115,000.

In this example, your loan to value would be 90%. You would be required to pay private mortgage insurance because the loan to value is based off of purchase price and not the appraised value. On a refinance, however your loan to value is based on the appraised value

If you liked this information or found it helpful, please email it, forward it, or share it with others who might like it.

Ron Meyer
(920) 213-0428
www.gsfron.com
rmeyer@gogsf.com