Lender-Paid Mortgage Insurance (LPMI)

Lender-Paid Mortgage Insurance (LPMI) is a type of insurance that protects the lender if a borrower defaults on their mortgage. Instead of the borrower paying for private mortgage insurance (PMI) monthly, the lender pays a one-time premium upfront or includes it in the loan's interest rate. This can result in lower monthly payments for the borrower. However, borrowers typically have a higher interest rate, which can make the overall loan more expensive in the long run. LPMI can be a good option for those wanting to avoid upfront costs or lower immediate payments.