Connecticut No PMI Loan Options

PMI or Private Mortgage Insurance is how lenders and banks protect themselves should a borrower default on their loan. Mortgage Companies typically require PMI on loans where borrowers are unable to put down at least 20%. These loans are looked at as having more risk and are required to have the additional cost of PMI.

A few ways to avoid Private Mortgage Insurance is to obviously come up with a down payment greater than 20%. Some loans allow for gifts where you can borrow the money from a relative and use to avoid PMI

If this option is not available you can see if taking out two mortgages instead of one is an option. The second mortgage is called a piggy back and though the interest rate may be higher than the first it should reduce your overall costs buy avoiding the PMI payment and additional taking the interest portion as a tax deduction.

One more option would be to speak to your lender about Lender Paid Insurance (this is something we do at Northeast Financial). This is typically paid as a lump sum and avoids the cost of the monthly PMI or can be calculated into the interest rate where you may pay a slightly higher interest rate but the overall savings could be worth it.

For any questions do not hesitate to reach out to me.

Craig Thibeau
Senior Loan Officer
North East Financial Middletown, CT
Ph 860-334-1354
NMLS 398576 Company NMLS 117273
craig@northeast-mortgage.com
www.northeast-mortgage.com