Do lenders offer any alternative to mortgage insurance?
Some lenders offer alternative options other than purchasing PMI. Under these programs, a premium may be added to the interest rate. This could be a benefit as private mortgage insurance is generally not tax deductible and mortgage interest may be. You may wish to consult with a tax advisor or an accountant for information and advice on this matter. Lender-paid private mortgage insurance (LPM) differs from Borrower paid mortgage insurance (BPMI) in that it may not be cancelled, usually has a higher interest rate than BPMI and may be tax deductible. Lenders must disclose a 10 year generic analysis comparing LPMI and BPMI at loan commitment.
