<prompt> Human: I live in a high cost of living area and to save for a down paymentclosing costs it might take 6-8 years of fairly aggressive saving. I really hate the idea of paying PMI. But I know with these lender paid PMI mortgages they will just charge you a higher rate. Does it make sense financially to do a lender paid PMI in certainmosta few circumstances or is this just about taking advantage of people who are very averse to the PMI acronym?  <response>: Long answer: You are paying either way. I will say that with LMPI you are locked into that rate forever and require a refi to get to a lower rate. With PMI you might be able to drop it without refi once you hit 80. However, if you need to refi to get rid of PMI and rates go up before you hit 80, the LPMI would have been better. So really its find out what is best now vs. where you think the interest rates will be in 5-10 years which you wont be able to predict.Short answer: If you can drop PMI after you hit 80 without a refi with your mortgage, do that. 