If you thought that mortgage insurance was paid by the borrower until there was at least 20% equity in the home, you would be mistaken. You would be surprised if you knew how many borrowers and people in general have no idea that 2017 Lender Paid Mortgage Insurance even exists. Now if you are like most, you are probably wondering what Lender Paid Mortgage Insurance even is. Lender Paid Mortgage Insurance, also known as LPMI, applies to Conventional Loans only is a product you can choose that will eliminate the monthly Mortgage Insurance payment you would get on a loan with less than 20% equity/down-payment.
This program came about to cater to borrowers who weren’t thrilled with the need for an additional amount added into their monthly mortgage payment. This amount could be hundreds of dollars per month and can add thousands to your mortgage payment on a yearly basis. If you are interested in the 2017 Lender Paid Mortgage Insurance you will see that there are 2 ways to go about getting Lender Paid Mortgage Insurance or LPMI and see your monthly mortgage payment get reduced accordingly.
As we have gone over 2017 Lender Paid Mortgage Insurance, it is a pretty easy comparison to show the differences between this and PMI on FHA Loans and Conventional Loans. First of all for FHA Loans, the premium is seen for the lifetime of the loan and is paid for the entirety of the loan if it is not refinanced. The Mortgage Insurance Premium is calculated by taking the amount borrowed, multiplied by 0.085% and then divided by 12. For example on a $200,000 loan the amount would be $1,700 divided by 12 or $141.67 per month. For Conventional Loans there is no set percentage on the amount charged for mortgage insurance, but there are factors that come into play such as Down Payment amount, the type of property, and FICO credit scores. If your credit risk is minimal, you will more than likely see cheaper rates and less monthly for your mortgage insurance. For Conventional Loans your mortgage insurance will be removed at 78% LTV automatically.
As you can see, if you have a great credit score and extra funds, seller’s concessions, or a lender credit, you should take advantage of the 2017 Lender Paid Mortgage Insurance. Not many borrowers think about using it, but those that do will see a great benefit to their monthly payment. If you want to see if the 2017 Lender Paid Mortgage Insurance is an option for you, contact us today either by email at email@example.com or by calling 888-900-1020. We look forward to working with you.