If I am planning to put 5% down on a $350K home, should I consider LPMI (lendor-paid mortgage insurance)?

Asked by matkins87, Houston, TX Thu Sep 26, 2013

I am planning to put 5% down on a home worth $350K. Is it better for me to work PMI into my interest rate (lendor-paid mortgage insurance) or to pay PMI monthly?

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Mark McNitt, Agent, Houston, TX
Thu Sep 26, 2013
There is another option! A 2nd mortgage. Slightly higher rate on that 2nd, small loan. However, you apply that amount to the first mortgage for your total "down payment" eliminating the PMI. You would get a 15% 2nd loan and combine with your 5% down for a total of 20% down.

The dollars amounts you pay may end up being about the same as paying an increased rate, but my example would make it possible to pay off the 2nd loan early thus saving you some money VS the life of the loan. Need to compare cost and consider the write-off with your income taxes come April.

I have a great set of lenders if you need to speak to the experts!! http://www.markknowshouston.com/res_list.php?cat=12282&c…

Let us know if we can be of assistance! My 20+ years of experience may come in handy!!

Mark McNitt
m 832-567-4357
Bernstein Realty, Inc.
0 votes
Rick Walters, Mortgage Broker Or Lender, Magnolia, TX
Thu Sep 26, 2013
If you plan to keep this property for at least 5 years a better solution would be a single upfront PMI option. Your interest rate would not change and this can be paid by the seller through seller contribution. If you would like more information please contact me at 281-928-7994.
0 votes
Joe Cano Jr, Agent, Houston, TX
Thu Sep 26, 2013
You stop paying PMI once you are at 80% of the loan or have 20% equity.

Joe Cano - Realtor./Locator
(281) 785-5132
0 votes
Don Groff, Agent, Austin, TX
Thu Sep 26, 2013
The problem with LPMI is you are stuck with that rate for the life of the loan... and the rate is higher because of the LPMI built in. So go with the monthly and when you get to a 78% LTV you can get rid of the MI and keep the lower rate.

If you want a quote from the top wholesale lenders in the country please give me a call. My rates and fees are considerably less than retail lenders out there.

Hope this helps.

Don Groff | REALTOR® & Mortgage Broker
Austin Real Estate Pros & 360 Lending Group
o 512.669.5599 | m 512.633.4157 | listings@dongroff.com
websites: http://www.AustinListed.com | http://www.360LendingGroup.com
0 votes
Bobbie Wagner…, Agent, Conroe, TX
Thu Sep 26, 2013
I have a great lender who can answer all of your questions. If interested, call me at 713-530-4098
0 votes
Chase Coleman, Agent, Houston, TX
Thu Sep 26, 2013
If you can get the lender to pay it then by all means see if they can. Now, most of the time that will effect your rate so you just have to run both scenarios to see how it effects your monthly payments. If you plan on paying more on your principle each month then it may be beneficial to just pay the monthly PMI without affecting your rate since you can cancel it once you are 80% loan to value.

Hope this helps and good luck!
0 votes
Al Geffon, Agent, Houston, TX
Thu Sep 26, 2013
This is a question that a lender can better answer. If he/she is working in your best interest, you should receive the advice that would work best in your situation.
0 votes
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