How to Calculate PMI in Texas

PMI, or Private Mortgage Insurance, is generally required by home loan lenders as a means of protection in the event the borrower defaults. Typically, private mortgage insurance in Texas as well as other states is required for borrowers that seek loans ranging from 80 percent to 100 percent of the purchase price. For instance, a Texas borrower buying a home for $150,000 and taking a loan of $135,000 is borrowing 90 percent of the purchase price and putting down 10 percent.

Obtain a PMI table. Ask your Texas mortgage broker or title company for a private mortgage insurance table. This table applies to home loans in all states and is standardized. Loans ranging form 80.1 percent to 85 percent over 30 years carry a 0.32 rate. Loans between 85.1 and 90 percent have a 0.52 rate. While loans of 90.1 to 95 percent and loans of 95.1 to 97 percent have 0.78 and 0.90 rates, respectively.

Determine your loan percentage amount using the table then find the PMI rate. Multiply your loan amount by the rate. For instance if you borrowed $135,000, which is 90 percent of the purchase price, you would multiply 135,000 with 0.0052. This comes to $702.

Find the monthly rate of your PMI. Using the above example, divide $702 by 12 months. Your monthly PMI rate would be $58.50 per month.