LPMI

Lender Paid Mortgage Insurance (LPMI):

Lender paid mortgage insurance is another option should you decide to take out one loan valued over 80% of your equity. What this typically translates to is a slightly higher interest rate and the lender paying the monthly mortgage insurance. The real advantage is no monthly mortgage insurance premium is due; the disadvantage is you are accepting a higher interest rate, and you cannot petition later to have LPMI removed like private mortgage insurance. Depending on your credit grade, lender paid mortgage insurance is typically has a slightly lower overall payment than private insurance programs, however if you are able to remove private mortgage insurance quickly or plan on staying in the home of a substantial period of time, private mortgage insurance will turn out more cost effective. Weigh these options before making your decision.

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