What is Mortgage Insurance?
Mortgage insurance (MI) products help borrowers become homeowners sooner by allowing people to qualify for loans with smaller down payments. Although often referred to as private mortgage insurance (PMI), that description is not the best as there are many available MI products that have benefits for those purchasing real estate.
At Sierra Pacific Mortgage, we offer a diverse line of home loan options, including MI options for lender or borrower-paid premiums, and some of the options can be financed as part of the mortgage or paid monthly. This flexibility enables the perfect mortgage insurance solution for each borrower as needed for a home purchase. To learn more, Email our office or call 619-894-8943.
Borrower Paid Mortgage Insurance
With borrower-paid mortgage insurance (BPMI), the borrower pays the Mortgage Insurance premium, either monthly or as a single up-front premium. Single premiums may be financed into the loan. Borrower-paid mortgage insurance (BPMI) helps lenders offset the risk of a low-down payment mortgage. Borrowers can qualify for a loan with a smaller downpayment, enabling them to purchase a home sooner, in contrast to taking additional time to build up savings for a larger down payment.
We Help People Get the Right Loans for Their San Diego Home
Contact our Mission Valley, San Diego County office to discuss loans and possible mortgage insurance options that work for your situation, allowing you to get the home that is best for you. Don’t hesitate to Email us or call 619-894-8943.
Lender Paid Mortgage Insurance
Lender-paid mortgage insurance (LPMI) the lender pays the mortgage insurance premium on the borrower’s behalf, while charging a slightly higher interest rate on the loan. The benefits to borrowers include:
- Elimination of MI closing costs and monthly MI premiums
- Lower down payment needed – freeing up cash
- Possibility of qualifying for a larger loan without increasing monthly payments
Single or Single Financed Premium Mortgage Insurance
Borrowers can pay a one-time lump sum payment, or if they don’t have sufficient funds at closing, Single Financed Premium lets them finance their mortgage insurance into the loan amount. This attractive option offers a low monthly payment and reduces the amount necessary at closing. Single Financed Premium MI is best for borrowers who want to minimize their monthly payment. Benefits to borrowers include:
- Borrowers may qualify for a larger loan because of the lower payment
- MI premium may be tax-deductible
- Single monthly payment
- Monthly payments that never vary
- Lowest MI cost option for most consumers