So, whenever a lender says that there is NOT mortgage insurance and you are doing only 10% down, it means one of a couple things. A) it is rolled into the interest rate, or B) you are prepaying it.
PMI as a monthly payment can be removed after 2 years and with 20% equity. Therefore, why would you take a HIGHER interest rate for the entire 30 year term of the loan, when you could remove it in 2 years?
The only situation where it makes sense to do a lump payment is if the seller is paying it FOR you, essentially buying out your PMI.
These tactics are good "marketing terms" ie: "we have no PMI", but in reality you are best served taking a lower interest rate and PMI that you can remove after 2 years with 20% equity...
RenÃ© De Blanco
BluFi Lending Corporation
1450 Frazee Road, Suite 301
San Diego, CA 92108