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Lender-Paid vs. Borrower-Paid Mortgage Insurance

Private mortgage insurance (PMI) lets buyers get a conventional mortgage without a large down payment. PMI protects a lender against loss, and is usually required with a down payment less than 20% of the home value.

Lender-paid mortgage insurance (LPMI)

  • LPMI usually results in lower monthly payments than borrower-paid mortgage insurance, but also carries a higher interest rate.
  • It remains for the life of the loan, so it can't be canceled unless the loan is refinanced or paid off.
  • Over time, you may end up paying more with LPMI.

Borrower-paid mortgage insurance (BPMI)

  • BPMI results in higher monthly payments at first, but will be canceled at a certain point.
  • Once BPMI is removed from the loan, your monthly payments will be lower than with LPMI.

Please talk to a home mortgage consultant for complete details so you can choose the right PMI option for you.


You can pay additional principal to get rid of BPMI even faster.
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