LOAN PROGRAMS - NO PMI OPTION

First, it is very important that you understand exactly what PMI is and what it does for you. PMI stands for Private Mortgage Insurance, which is required on virtually all conventional loans when your down payment is less than 20% of the appraisal value or the sale price. In these situations, PMI protects the lender in the event that you default on the loan. PMI charges vary depending on the size of the down payment and the loan, but they typically amount to about one-half of one percent of the loan, The monthly PMI premium is included in your monthly mortgage payment and not tax deductible. PMI must be carried with your home loan for at least one year before you can request its elimination. To eliminate your PMI, you must demonstrate that:

  • Your loan balance is 80% or less of the current market value
  • You have made all your mortgage payments in a timely manner for 12 consecutive months

Ways to Avoid PMI

One way to avoid PMi is paying more interest in the loan you borrowed. Some lenders will waive the mortgage insurance requirement if the buyer accepts a higher interest rate on the mortgage loan. The rate increases generally range from .75 percent to 1 percent, depending on the down payment. The advantage is that mortgage interest is tax deductible. 

At Lending Century we work on a smart way for you. We provide financing options that eliminate the need for PMI when your down payment is less than 20% of the purchase price. We accomplish this by providing you with two loans with the following format.

  1. A first mortgage for up to 80% loan-to-value (determined by a property appraisal or purchase price of the home, whichever is lower).
  2. A second mortgage to cover the remaining balance. The second mortgage has a higher interest rate but since it applies to less than 20% of the total loan, the monthly payments on the two mortgages are still lower than paying one mortgage with mortgage insurance. Plus, again, there is the advantage of mortgage interest being tax deductible.

Here is an example on how No PMI option might benefits you:

  90% (PMI Option) 80/10/10 (No PMI Option)

Property Value
Loan Requested

30-Year Fixed @ 5.50%
Private Mortgage Insurance (PMI)
Total Monthly Payment
$300,000.00
(90%) $270,000.00

$1533.03/month
$117.00/month
$1650.03
$300,000.00
(80%) $240,000.00
(10%) $30,000.00
1st TD $1362.69/month
2nd TD $118.75/month
$1481.44

  YOUR MONTHLY SAVINGS $168.59  

With the market's historically low interest rates, there is no reason to wait for tomorrow--and plenty of reason to act today. Complete our Quick App or call one of our loan analysts at 1-888-397-6669, to find out what is the right program for you!

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Not the program you are looking for? Don’t forget to check out our other options.
 Here are the some of our program highlights:
  • Stated Income/No Documentation (Perfect for self-employed individuals or borrowers who may have difficulties documenting income via traditional methods: 2 years of tax returns, pay stubs, and W2 forms)
  • 1st time home buyers
  • 2nd homes or vacation homes
  • Investment properties
  • 1-4 unit properties
  • Less than perfect credit
  • Interest only option