An agent partner of mine asked about a loan program that he heard advertised on the radio. One of our competitors (to remain nameless) is advertising a mortgage program billed as “PMI Advantage”. The advertisement states “PMI can cost you thousands. Let us pay the PMI so you don’t have to“. Who would pass up an offer like that? Heck, if an airline tells me “let us pay your baggage fee so you don’t have to”, that would be music to my ears! That is, until I discovered that the airline ticket itself will cost me substantially more. Here is the inside scoop: “lender paid pmi” is nothing new. It has been around almost as long as pmi itself, & most lenders offer this, including us here at Ross Mortgage. Quite simply, the lender pays for your pmi, in exchange for a higher interest rate on your mortgage. I will listen harder next time, but I don’t think that this fact was presented in the radio ad! It IS explained on the company web site if you click in the right spot. A higher rate in exchange for no PMI can be a decent choice in some cases, such as short term ownership. But as with all things related to home finance, one needs to get ALL the facts before one can make an educated decision!
Latest posts by Tony Abate (see all)
- TRID Is Upon Us! - October 8, 2015
- Will Fannie Mae’s New Collateral Underwriter™ Crush the Appraisal Process? - January 22, 2015
- What is a “PMI Advantage”? - January 22, 2015