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What's the difference between lender-paid and borrower-paid mortgage insurance?

Here's a quick comparison that will walk you through some of the factors to consider when you're choosing between lender-paid mortgage insurance and borrower-paid mortgage insurance.

 
Lender-paid mortgage insurance1Borrower-paid mortgage insurance2

Lower total monthly payments in the beginning

Higher total monthly payments at the outset

Same total monthly payment amount for the life of the loan

Decreased total monthly payment amount after PMI is removed2

Higher interest rate

Lower interest rate

Can't be removed from your loan

May be removed if certain conditions are met2

May qualify for higher mortgage amount

May not qualify for as much

Compare LPMI and BPMI loans in a detailed scenario to choose the mortgage insurance that works for you. Consult your BB&T home mortgage professional for more details.

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1Available products include fixed rate conventional 30 Year and 20 Year loans, Home Now 30 Year and 20 Year loans, and First Time Home Buyer (FTHB) 30 Year loan. (BB&T product numbers 101, 104, 111, 153, 154, and 126.)

2The mortgage loan servicer must automatically terminate borrower paid private mortgage insurance on the termination date, as long as the borrower is current on payments and continues to use the property securing the loan as his or her primary residence. The termination date is the date on which the principal balance of the mortgage is first scheduled to reach 78% of the original value of the property securing the mortgage, based solely on the amortization schedules and irrespective of the outstanding balance for the mortgage on that date. If the private mortgage insurance is not otherwise canceled or terminated as described above, the mortgage loan servicer will terminate it at the midpoint amortization period, as long as the borrower is current on payments.

For comparison purposes, a 30-year fixed rate mortgage of $200,000 with a 20% down payment at an APR of 4.199% with 0.125 discount points and a $895 origination fee with a credit score of 720 would result in 360 equal payments of $969.30. This payment does not include tax or insurance costs—the total payment obligation may be higher. This is a representative example based upon rates that were effective as of 10/24/17. Rates and programs may change at any time.

For comparison purposes, a 15-year fixed rate mortgage of $200,000 with a 20% down payment at an APR of 3.378% with 0.125 discount points and a $895 origination fee with a credit score of 720 would result 180 equal payments of $1,405.34. This payment does not include tax or insurance costs—the total payment obligation may be higher. This is a representative example based upon rates that were effective as of 10/24/17. Rates and programs may change at any time.

For comparison purposes, a 3-year adjustable rate mortgage of $200,000 with a 20% down payment at an APR of 4.101% with 0 discount points and a $895 origination fee with a credit score of 720 would result in 36 equal payments of $926.23 and 324 equal payments of $965.82. This payment does not include tax or insurance costs—the total payment obligation may be higher. This is a representative example based upon rates that were effective as of 10/24/17. Rates and programs may change at any time.

For comparison purposes, a 5-year adjustable rate mortgage of $200,000 with a 20% down payment at an APR of 4.052% with 0 discount points and a $895 origination fee with a credit score of 720 would result in 60 equal payments of $926.23 and 300 equal payments of $963.40. This payment does not include tax or insurance costs—the total payment obligation may be higher. This is a representative example based upon rates that were effective as of 10/24/17. Rates and programs may change at any time.

For comparison purposes, a 7-year adjustable rate mortgage of $200,000 with a 20% down payment at an APR of 4.020% with 0.125 discount points and a $895 origination fee with a credit score of 720 would result in 84 equal payments of $926.23 and 276 equal payments of $960.90. This payment does not include tax or insurance costs—the total payment obligation may be higher. This is a representative example based upon rates that were effective as of 10/24/17. Rates and programs may change at any time.

For comparison purposes, a 10-year adjustable rate mortgage of $200,000 with a 20% down payment at an APR of 4.110% with 0 discount points and a $895 origination fee with a credit score of 720 would result in 120 equal payments of $954.83 and 240 equal payments of $965.24. This payment does not include tax or insurance costs—the total payment obligation may be higher. This is a representative example based upon rates that were effective as of 10/24/17. Rates and programs may change at any time.

Loans, lines of credit and credit cards are subject to credit approval.

All BB&T mortgage professionals are registered on the Nationwide Mortgage Licensing System & Registry (NMLS), which promotes uniformity and transparency throughout the residential real estate industry. Search the NMLS Registry.

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