Quote:
Originally Posted by JohnnyD
My lender was able to structure the loan so that we bought out PMI. We pay a slightly higher interest rate (3.737%, instead of the 3.625%) but buying out(through taking out the higher interest rate) the PMI saved us almost $100/month.
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It's called lender paid PMI and is usually the way to go. There is PMI on the loan it was just paid by your lender. There are 2 types of LPMI lender paid mortgage insurance. Lender paid single. This is when the lender pays the pmi in a lump sum and lender paid monthly where your lender pays the pmi company on a monthly basis. It's the smart way to go. But a lot of times the customer doesn't even know that the lender did LPMI which is not good practice. The rate change can be from .125 to .5 depending on credit score and ltv.
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