Lender Paid PMI
Should you avoid PMI with a Lender-Paid PMI Loan?
Often referred to as ‘Lender Paid PMI’ or ‘Financed Mortgage Insurance’, many lenders offer customers the option to accept a higher interest rate in exchange for no private mortgage insurance (PMI). For the lender, this is a great deal, but we almost never recommend this option for our customers because it traps the homebuyer in a higher interest rate for the life of the loan.
Since loans with private mortgage insurance (PMI) require the lender to remove the PMI once the homebuyer has 20% equity in the home – whether the loan balance is paid down or the home appreciates in value – the normal PMI loan is usually a better option.
If you’re considering buying a new home using PMI, learn more about whether it is ever a good idea to get a loan with mortgage insurance or contact us to receive a personal recommendation in light of your unique circumstances.
If you want to avoid paying PMI, we offer several better options than lender paid PMI programs. Here are a few of the best ways you can avoid PMI.
At Hurst Lending & Insurance, we strive to make sure each customer is completely satisfied with their home financing. That’s why we’ve created 1% down no PMI, 5% down no PMI, and other low down-payment no PMI loan programs. We curate programs as diverse as the homebuyers we serve in order to make sure anyone capable of owning their dream home can purchase their dream home. Please do not hesitate to call one of our mortgage experts in order to get a customized quote or simply have a few of your questions answered.