The amount add to the borrower's monthly payment is $313.33.
Given that lender requires PMI that is 0.8% of the loan amount of $470,000.
A loan's PMI, or personal mortgage insurance, is a type of mortgage insurance used by lenders when making traditional loans such as home loans. A PMI helps cover the loss to the lender (bank) if the borrower stops making monthly mortgage payments on their home loan. Therefore, the PMI can be described as a kind of risk mitigation tool for the bank when the borrower defaults on their EMIs (monthly mortgage payments). So, PMI for a borrower is an additional cost or payment for the borrower on top of his monthly payments i.e. EMI.
Thus, the additional amount of dollars that the borrower has to pay for the PMI on his loan along with his monthly mortgage payments
= Principal Loan amount × (PMI/12)
= $470,000 × (0.8%/12)
= $470,000 × (0.008/12)
= $470,000 × 0.0006666667
=$313.333349
Hence, the additional monthly payment for PMI where lender requires PMI that is 0.8% of the loan amount of $470,000 is $313.33.
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