NO PRIVATE MORTGAGE INSURANCE (PMI) LOANS
I'm sitting here in my office listening to a radio ad play multiple times regarding "no private mortgage insurance loans". Homebuyers have learned to hate PMI insurance. When a lender is offering NO PMI insurance, it gets their attention.
Typically when a lender is offering NO PMI insurance it is a good idea to do a comparison to a loan with PMI insurance. The loan without PMI insurance can be offered as LPMI (lender paid private mortgage insurance).
I can offer a homebuyer a mortgage loan with and without PMI insurance. The loan without PMI insurance has a lower interest rate; the one without monthly PMI insurance has a higher rate. Loans without monthly PMI are a thing. Usually it is because the lender is absorbing that into the interest rate.
Mortgage loans without PMI insurance may be a good choice if one is not going to be in the home very long; maybe the higher rate is worth it. Over the life of the loan it can be a different story.
When offered a loan without PMI insurance do the math and make sure it works for you, the homebuyer. Some lenders have very low PMI insurance premiums, and in a situation where the PMI drops off at 78% LTV, see how long that will take to attain. It can be a better choice than taking a higher interest rate for NO PMI.
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