No PMI Mortgage: Mortgage Insurance Buster Loans
If you’re looking to save on your mortgage, avoiding private mortgage insurance (PMI) can make a big difference. No PMI mortgage options make homeownership more affordable from the start, freeing up your budget for other priorities.
- Avoid making PMI payments
- Down payments as low as 5%
- Lower upfront homebuying costs
Featured In
Benefits
Benefits of a No PMI Mortgage Loan
Lower your monthly mortgage payment:
By eliminating PMI, you can save money on your monthly mortgage payments and lower your financial burden.
Less money required upfront:
With as little as 5% down required and no PMI, this loan program can make homeownership more affordable.
Improve cash flow:
Redirect the money you save on PMI every month to other priorities, such as home improvements, investments, emergency funds, or debt repayment.
Achieve your homeownership goals sooner:
Speed up the homebuying timeline by utilizing a low down payment, no PMI mortgage.
Long-term savings potential:
Although no PMI mortgages tend to have slightly higher rates, many borrowers still come out ahead in the long run by avoiding years of monthly PMI payments.
How it Works
How Does Griffin Funding’s No PMI Mortgage Program Work?
Griffin Funding’s no PMI mortgage program lets you buy a home without paying for private mortgage insurance. This program is especially helpful for first-time home buyers or others who may not have a large sum saved for a down payment.
If you’re looking for a mortgage but haven’t saved up at least 20% for a down payment, Griffin Funding’s no PMI loans offer a way to make homeownership possible sooner, with less money required upfront. A no PMI mortgage loan involves the lender paying the MI rather than the borrower. It’s also known as Lender Paid Mortgage Insurance (LPMI), a piggyback second mortgage, or a non-QM loan.
Key No PMI Mortgage Features
- Avoid PMI with as little as 5% down
- Skip paying costly monthly PMI premiums
- Purchase a home sooner with less money upfront
- Slightly higher rates in exchange for saving on PMI
Where We Lend
Work with a trusted no PMI mortgage lender. Griffin Funding offers low down payment, no PMI mortgages across the country. Click on your state or reach out to learn more.
Frequently Asked Questions
You can usually avoid private mortgage insurance (PMI) by making a down payment of at least 20% of the home’s purchase price. Some loan programs may offer alternatives, but 20% is the standard threshold lenders use to waive PMI and lower your monthly costs.
Homeowners insurance protects you, covering damage to your property and liability if someone gets hurt on your property. PMI, on the other hand, protects the lender—not you—if you default on the loan. Insurance is required for nearly all homeowners, while PMI only applies if your down payment is under 20%.
You can request to remove PMI once you reach 20% equity in your home, either through paying down your loan balance or an increase in property value. Lenders are required to automatically cancel PMI when you hit 22% equity, as long as you’re current on your mortgage payments.
Government-backed loans like VA loans, USDA loans, and FHA loans all offer options that allow you to avoid PMI:
- VA loans: Avoid PMI with a VA loan, which can save you a significant amount on monthly payments. A VA loan provides options for eligible service members, veterans, and surviving spouses to buy a home with great benefits. Unlike conventional loans, where lenders require PMI if you put down less than 20%, mortgage insurance on VA loans works differently. While VA loans don’t require PMI, they do charge a one-time VA funding fee.
- USDA loans: A USDA loan helps make homeownership more affordable in rural and suburban areas. With a USDA loan, you can buy a home without a down payment and still avoid PMI. Instead of PMI, USDA loans charge a small upfront fee and an annual fee that is generally lower than standard PMI.
- FHA loans: FHA loans require a smaller down payment, often around 3.5%, which is lower than many conventional loans. However, instead of PMI, FHA loans use a similar type of insurance called MIP, or mortgage insurance premium. When comparing PMI vs. MIP, the difference is that PMI is required on conventional loans with down payments under 20%, while MIP applies specifically to FHA loans regardless of down payment. MIP has both an upfront cost and an annual premium, which can be rolled into your mortgage payment.
If you’re looking to avoid PMI but don’t qualify for a government-backed loan with no PMI, there are other options to help you skip this extra monthly expense. Here are a few ways you might get a conventional mortgage loan with no PMI:
- Make a 20%+ down payment: The simplest way to avoid PMI is by putting down 20% or more, which most lenders require to waive PMI.
- Purchase highly appreciable property: Buying a home in a rapidly appreciating market can help you build equity faster, allowing you to cancel PMI sooner.
- Research home buyer assistance programs: In some cases, no PMI options for first-time home buyers are available through state or local assistance programs that provide down payment help, reducing or eliminating PMI requirements.
- Use a piggyback loan: With an “80-10-10” or an “80-15-5” loan, you take out a second loan to cover part of your down payment, so you only need to finance 80% with your primary mortgage, letting you avoid PMI.
Lender Paid Mortgage Insurance can be a good idea if you want to avoid PMI payments while putting less than 20% down on a home loan. PMI costs add up over time, so having the lender cover those costs can ease the financial burden of buying a home. However, keep in mind that LPMI programs tend to come with slightly higher interest rates since the lender is taking on this extra cost.
LPMI is often best-suited for borrowers who plan on refinancing or selling at some point in the future. Working with a mortgage lender that doesn’t require PMI and offers flexible refinance solutions that you can take advantage of once you have some equity built up can help you get the most out of a no PMI mortgage.