With lender-paid mortgage insurance, the cost of the PMI premium is added to your interest rate.


If you are able to get lender-paid mortgage insurance, you still must pay a higher interest rate over the life of the loan – even after your equity reaches 20 percent and you could have cancelled PMI – and the insurance amount may not be tax-deductible., If you have a lower credit score, the lender may be willing to take on the risk without insurance if you are willing to pay a higher interest rate.


The point of PMI is to allow you to finance a home at an affordable interest rate. However, if you're able to afford a slightly higher rate, it may be better for you in the long run because you can deduct mortgage interest payments from your taxes, but you cannot deduct PMI payments., Because credit unions are non-profit, they often have more options available for homebuyers who don't have the credit other lending companies desire, or who cannot afford larger down payments.Many credit unions will be willing to waive PMI or provide other cost-saving options for buyers with decent credit.In addition to credit unions, many banks offer special programs for certain types of buyers, including first-time home buyers or people willing to buy in a certain neighborhood.These programs may allow for low down payments and waive PMI. However, keep in mind you typically need pretty good credit to qualify for these programs.
Ask about the possibility of lender-paid mortgage insurance.
Offer to buy out the PMI by paying a higher interest rate.
Consider borrowing from a credit union or through a special program.
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