Definition
LPMI means the lender pays mortgage insurance in exchange for a higher interest rate. It avoids monthly PMI payments but increases your loan cost long-term.
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LPMI avoids monthly PMI payments but increases mortgage rate 0.25%-0.5%. Effective if planning shorter ownership period; worse long-term if staying.
Pro Tip
Compare LPMI versus traditional PMI. Depends on ownership timeline and rate sensitivity.
Example
LPMI with 0.5% higher interest rate instead of paying PMI separately.