What is borrower-paid monthly mortgage insurance (BPMI)?

Borrower-paid monthly PMI Borrower-paid monthly mortgage insurance (BPMI) is the most common type and is often known simply as “PMI.” It is the “default” type of PMI, and the payment is tacked onto the regular mortgage payment. BPMI can be canceled. You pay it until your loan principal drops to 78% of the home’s value.

What types of private mortgage insurance work best?

You’re not stuck with just one type of PMI, and you should explore the different types of private mortgage insurance to determine which works best for your mortgage. Monthly borrower-paid mortgage insurance (BPMI) is the most common PMI choice because it allows you to spread the cost out and add it to your monthly payment.

Should you buy a mortgage if you pay PMI monthly?

A higher rate enables the lender to cover the cost of a lump-sum buyout of your mortgage insurance. Home buyers who choose lender-paid mortgage insurance might have a lower mortgage payment than if they paid PMI monthly. Having a lower monthly mortgage payment could mean qualifying for more home.