Lender-Paid Mortgage Insurance

When buying or refinancing an eligible property, Private Mortgage Insurance (PMI, also called Borrower-Paid MI), allows homebuyers and homeowners to complete those transactions with less money down. There is no premium or increase to the interest rate, but the monthly mortgage payment is higher in the amount of the MI.

An alternative to PMI is Lender-Paid Mortgage Insurance (Lender-Paid MI, also called LPMI). With LPMI, the mortgage insurance is paid in the form of a slightly higher interest rate to the borrower. While a higher interest rate means a higher monthly mortgage payment, often times the total monthly mortgage payment associated with LPMI is actually lower than the total monthly mortgage payment associated with PMI.

There are many factors that go into deciding which mortgage insurance program is best. Consult an experienced mortgage professional for more information and assistance.

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