Know of any conventional lenders who don't require PMI?

[Melissa Searing]

Hi BP! Do any of you know of any conventional banks who will lend with no mortgage insurance without 20% down on a primary residence? I read about a program with Bank of America. 

http://money.cnn.com/2016/02/22/real_estate/bank-of-america-low-down-payment/

Has anyone utilized this program? I am looking for a South Carolina lender. 

Thanks!

[Chris Mason]

Hi @Melissa Searing,

"No PMI" is lender-paid PMI with a bumped rate paired with a marketing scheme.

It's great for lenders because it has a "built in" need for you to refinance once at 20% equity, to get the lower 20% equity + no PMI interest rate. We obviously do not sit here and get paid the same regardless of how many mortgages we do, so anything that has a built in refinance mortgage is great for lenders.

PMI is generally better for borrowers because it drops off automatically, without the need to refinance. And, in case rates go up, your rate is still fixed for 30 years. "Refinance to drop lender-paid PMI" is subject to future-current rates, which may be higher.