What is Lender Paid Mortgage Insurance?
R
Why pay PMI when your lender can pay it for you?
Private mortgage insurance (PMI) is a term every homebuyer will hear if he/she is buying a new home with less than a 20% down payment. Whether you are buying with a FHA or conventional loan, PMI is a necessary evil if you don't have the cash to make that 20% down payment. PMI rates vary, but expect a significant payment increase if you are required to pay it monthly.
Lender Paid Mortgage Insurance
Lender paid mortgage insurance is exactly that. Instead of you paying PMI upfront in a lump sum or monthly as part of your mortgage payment, your lender pays it. Now, as you've probably guessed, this isn't free. Your lender will offer you a slightly higher interest rate in exchange for paying the PMI. However, the payment increase resulting from the higher rate is almost always lower than the monthly PMI you'd be paying on your own.
As with all conventional loans, your down payment, credit score, and loan amount will determine how much extra interest you'll pay with lender paid PMI. As always, talk to your lender about all options available to you and your specific situation.
Related Calculators
Conventiona Loan CalculatorRead More
Mortgage Rate Predictions 2025: Here’s What Experts Are Predicting
See 2025 mortgage rate predictions from experts like Fannie Mae & NAR. Learn what to expect if you're buying, refinancing, or investing.
2025 USDA Loan Requirements: Everything You Need to Know
Learn the 2025 USDA loan requirements, including income limits, credit score, and how to buy a home with no down payment in eligible areas.
VA Construction Loan: Build Your Dream Home with Zero Down
Build your dream home with a VA construction loan. Learn how it works, who qualifies, and how to get started; no down payment or PMI required.
2025 FHA Interest Rates
Learn how FHA interest rates work, what affects them, and how to get the best rate, especially if you're a first-time buyer or have lower credit.
What Is PMI? Learn How Private Mortgage Insurance Works
What is PMI? Learn how Private Mortgage Insurance works, why it’s required, how much it costs, and how to avoid or remove it from your loan.
Buying a House? Here's How to Keep Your Documents Secure
Buying a house is probably the largest purchase you will ever make in your lifetime. During this exciting yet stressful process, you want two things to go smoothly: closing the deal on your home without delays and getting definitive proof that you own the property. After all, that's the ultimate goal. However, some unfortunate accidents might happen if you don't keep your documents organized and secured during this process. Why exactly do you need to manage your home purchase documents? And how