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PMI Over Life of Loan Calculated Into APR?

Question: 
When calculating PMI in the APR, I know that the up front PMI app fee, premium and reserves are calculated into the apr. What I would like to know is that if the PMI payments over the life of the loan is calculated into the APR also?
Answer: 

Answer by Dan Persfull: Yes. The premiums collected at or before closing are prepaid finance charges. Those collected over the life of the loan are "regular" finance charges.

You can find additional information for disclosing the premiums in the payment stream by reviewing Reg Z section 1026.18 and its Commentary.

Answer: 

Answer by Richard Insley: PMI premiums included in the payment schedule must reflect any "steps" in the premium rates and also the automatic termination requirements of The Homeowner's Protection Act (HPA) of 1998. GMI premiums must reflect the annual reduction in premium amounts.

First published on BankersOnline.com 12/17/12

First published on 12/17/2012

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