Who pays for mortgage guaranty insurance (MI)?
The lender is the owner and beneficiary of the MI policy, thus, the lender pays the MI premium. However, with traditional MI products, the lender’s cost for MI is typically passed on to the borrower by adding it to the monthly principal and interest payment. For other types of MI products, the premium charges are passed on to borrowers through increases in the interest rate or fees charged in connection with the loan. The amount and extent to which MI premium charges are passed on by the lender to the borrower is a matter between the lender and the borrower, and is entirely out of PMI Mortgage Insurance Co.’s control.
