There is no such thing as ‘no PMI’ if you have less than 20% to put down on a property. You do, however, have the option to do what is called lender paid. Sometimes, it ends up costing too much to use this option, but with a conforming loan amount, and a borrower with great credit, this is totally possible and often times a great option. Basically the lender offers a higher rate to the borrower and takes the rebate from the higher rate to pay for the PMI. So the rate will be higher, however, you can’t write off mortgage insurance, but you CAN write off a higher interest rate.
You just must weigh out your current situation to see if it makes sense. Now with FHA loans, there is no way to waive the mortgage insurance or get the lender paid option. Lender paid mortgage insurance or LPMI, is only offered on conventional type financing.
Please let me know if you have further questions, I’d be happy to explore them with you! Maureen Martin – Your Lender for Life