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Top 10 Loan Providers in the USA

When it comes to buying a home, many interested homeowners aim to make a large down payment. Typically, a down payment of 20% of the home purchase price is considered ideal as it allows borrowers to avoid the financial obligation known as Private Mortgage Insurance (PMI). However, not everyone can afford such a huge upfront payment, this is where PMI plays an important role.

What is Private Mortgage Insurance?

PMI, or private mortgage insurance, is a type of insurance that protects lenders in case borrowers default on their mortgage payments. It is a financial safety net for lenders that allows them to approve loans with as little as 20% down payment.

Benefits of PMI:

Low down payment
Fast homeownership

Disadvantages of PMI:

Extra cost
No direct benefit to the borrower

How much is PMI?

The cost of private mortgage insurance (PMI) can vary depending on several factors such as the amount of the mortgage loan, the borrower's credit score, loan-to-value (LTV) ratio, and the PMI provider chosen. However, PMI typically costs between 0.3% and 1.5% of the original loan amount annually.

To calculate the annual PMI cost, you can multiply the loan amount by the PMI rate. For example, if you have a $200,000 mortgage with a PMI rate of 0.5%, the annual PMI cost would be $200,000 x 0.005 (0.5%) = $1,000. To find the monthly PMI cost, you can divide the annual cost by 12, in this case, $1,000 ÷ 12 = $83.33 per month.

7 Best Mortgage Insurance Providers in New York

MGIC (Mortgage Guarantee Insurance Corporation)

MGIC is one of the largest and most established mortgage insurance providers in the United States. Founded in 1957, MGIC is headquartered in Milwaukee, Wisconsin. It specializes in providing private mortgage insurance (PMI) to lenders and investors in residential mortgages. They offer a range of mortgage insurance products to lenders and borrowers. MGIC plays an important role in the U.S. housing market and enables borrowers to reach homeownership with down payments as low as 20%.

Genworth Mortgage Insurance:

Genworth Financial is a well-known financial services company that offers a range of insurance and wealth management products. Founded in 2004 and headquartered in Richmond, Virginia, Genworth has a significant presence in the United States and operates in various international markets. Genworth provides mortgage insurance solutions for homeowners and lenders. They have a significant presence in the mortgage insurance industry and offer a variety of coverage options.

Radian

Radian Group Inc., commonly referred to as Radian, is a financial services company based in the United States. Founded in 1977, Radian operates primarily in the mortgage insurance and risk management sectors. Radian is known for its mortgage insurance products and services. They have been a trusted name in the industry and offer ready-made solutions to meet various requirements.

National MI (National Mortgage Insurance Corporation)

National Mortgage Insurance Corporation, often referred to as National MI, is dedicated to providing mortgage insurance solutions to lenders and investors in the residential mortgage market. National MI provides risk management and loan enhancement solutions to its customers. They offer mortgage insurance coverage to help borrowers secure home loans with lower down payments.

Arch MI (Arc Mortgage Insurance Company):

Arch MI is a subsidiary of Arch Capital Group, a Bermuda-based company with a global presence in the insurance and reinsurance industry. Arch MI specializes in providing PMI, which is designed to protect lenders and investors in residential mortgages from financial loss in the event borrowers default on their loans. They compete with other major private mortgage insurers such as MGIC, Genworth Financial, Radian, and National MI.

Essent Guaranty

Essent Guaranty was founded in 2008 and is headquartered in Radnor, Pennsylvania. Ascent specializes in providing Private Mortgage Insurance (PMI), which allows borrowers to secure mortgage loans with a down payment of less than 20% of the home purchase price.