Lender Paid Mortgage Insurance is based on the same concept as private mortgage insurance (PMI). If the borrower finances over 80% of the loan, they are subject to mortgage insurance. LPMI is another option for the borrower to eliminate an additional payment that would otherwise be included in the monthly mortgage loan as private mortgage insurance. LPMI may result in a slightly higher interest rate or additional closing cost fees for the borrower. The structure of LPMI depends on the lender who is enrolled in the product. The borrower may find LPMI an advantage over private mortgage insurance payment (PMI). A few of them are:
***The advantages may not apply to all borrowers. Contact your tax preparer or CPA/Accountant to review your tax benefits for paying a higher interest rate versus PMI monthly payment.
The LPMI may increase the final rate of your loan. The rate is based on the following list. The qualifications are subject to change without notice.