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Mortgage Calculator PMI by Tons of Concrete

Total Mortgage Payment Formula:

\[ M_{total} = M + PMI \]

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1. What is a Mortgage Calculator with PMI?

Definition: This calculator estimates your total monthly mortgage payment including principal, interest, and Private Mortgage Insurance (PMI).

Purpose: It helps homebuyers understand their full monthly housing costs when making less than a 20% down payment.

2. How Does the Calculator Work?

The calculator uses the formula:

\[ M_{total} = M + PMI \]

Where:

Explanation: The calculator first determines your principal and interest payment, then adds PMI if your down payment is less than 20%.

3. Importance of PMI Calculation

Details: PMI can add significant cost to your mortgage. Understanding this helps with budgeting and deciding whether to make a larger down payment.

4. Using the Calculator

Tips: Enter the loan amount, interest rate, loan term (years), and down payment percentage. The calculator will show your PI payment, PMI (if applicable), and total payment.

5. Frequently Asked Questions (FAQ)

Q1: What is PMI and when is it required?
A: PMI is insurance that protects lenders when borrowers make down payments less than 20%. It's typically required for conventional loans with less than 20% down.

Q2: How much does PMI cost?
A: PMI typically costs 0.5% to 1.5% of the loan amount annually. Our calculator uses 0.85% as a default for loans with less than 20% down.

Q3: How can I avoid PMI?
A: Make a down payment of 20% or more, or consider lender-paid mortgage insurance or piggyback loans.

Q4: How long do I have to pay PMI?
A: For conventional loans, PMI automatically cancels when you reach 22% equity, but you can request cancellation at 20% equity.

Q5: Does this calculator include taxes and insurance?
A: No, this calculates only principal, interest, and PMI. Your actual payment may include property taxes and homeowners insurance.

Mortgage Calculator PMI by Tons of Concrete© - All Rights Reserved 2025