Lender-Paid Private Mortgage Insurance

Private mortgage insurance that a mortgage lender pays on behalf of a borrower. Mortgage lenders generally require private mortgage insurance if a mortgage has a loan to value (LTV) ratio of more than 80%. When a lender pays the private mortgage insurance on behalf of the borrower, they do so in exchange for charging the borrower a higher interest rate. In other words, the borrower still pays for the private mortgage insurance, but does so in the form of a higher interest rate.

The economics of the choice between paying private mortgage insurance, choosing lender paid private mortgage insurance, or using a second mortgage to avoid private mortgage insurance altogether is a function of how long borrowers estimates they will remain in a home or how long before they might refinance their mortgages and how quickly they estimate their home will appreciate.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Mortgage insurance — For information on insurance guaranteeing payment of the mortgage in the event of death or disability, see mortgage life insurance. Mortgage insurance (also known as mortgage guaranty) is an insurance policy which compensates lenders or investors …   Wikipedia

  • Mortgage Insurance — An insurance policy that protects a mortgage lender or title holder in the event that the borrower defaults on payments, dies, or is otherwise unable to meet the contractual obligations of the mortgage. Mortgage insurance can refer to private… …   Investment dictionary

  • Lenders mortgage insurance — (LMI), also known as Private mortgage insurance (PMI) in the US, is insurance payable to a lender or trustee for a pool of securities that may be required when taking out a mortgage loan. It is insurance to offset losses in the case where a… …   Wikipedia

  • Up-Front Mortgage Insurance - UFMI — An insurance premium that is collected, typically on Federal Housing Administration (FHA) loans, at the time the loan is initially made. It is in contrast to private mortgage insurance (PMI), which is collected by the lender each month when a… …   Investment dictionary

  • Mortgage life insurance — is a form of insurance specifically designed to protect a repayment mortgage. If the policyholder were to die while the mortgage life insurance was in force, the policy would pay out a capital sum that will be just sufficient to repay the… …   Wikipedia

  • Mortgage calculator — Mortgage calculators are used to help a current or potential real estate owner determine how much they can afford to borrow on a piece of real estate. Mortgage calculators can also be used to compare the costs, interest rates, payment schedules,… …   Wikipedia

  • Mortgage-backed security — Securities Securities Bond Stock Investment fund Derivative Structured finance Agency security …   Wikipedia

  • Mortgage loan — Mortgage redirects here. For other uses, see Mortgage (disambiguation). Finance Financial markets …   Wikipedia

  • Insurance — This article is about risk management. For Insurance (blackjack), see Blackjack. For Insurance run (baseball), see Insurance run. In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a… …   Wikipedia

  • Mortgage fraud — is crime in which the intent is to materially misrepresent or omit information on a mortgage loan application to obtain a loan or to obtain a larger loan than would have been obtained had the lender or borrower known the truth. In United States… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.