-----Original Message-----
From: michael.dubin@milliman.com [mailto:michael.dubin@milliman.com]
Sent: Monday, October 26, 1998 3:51 PM
To: casnet@lists.casact.org
Subject: Re: Private Mortgage Insurance
I think of PMI as interest. It is like increasing the interest rate to
reflect additional risk. A good portion is income to the lender.
Lenders want to charge what the market will bear and reflect this
additional risk without worrying about usury or charging excessive
interest.
When shopping for a mortgage, consider the opportunity cost of putting
more down versus the extra interest, including PMI, of borrowing more.
Also, let prospective lenders know that you consider PMI in the total
cost of the loan. Maybe it is something that they can reduce if they
know it might cost them the sale. If no lenders will lower PMI, I think
the market is competitive enough to draw the conclusion that the lender
needs this extra income to offset extra expenses in making high loan to
value mortgages.
Visit the CAS Web Site at http://www.casact.org
==============================================To subscribe or
unsubscribe from CASNET:
Send an e-mail to caslists@lists.casact.org
Type in the body join casnet to subscribe
or leave casnet to unsubscribe.
Visit the CAS Web Site at http://www.casact.org
===============================================
To subscribe or unsubscribe from CASNET:
Send an e-mail to caslists@lists.casact.org
Type in the body join casnet to subscribe
or leave casnet to unsubscribe.