What is Lender Paid Mortgage Insurance (LPMI)?

I'm familiar with PMI or Private Mortgage Insurance.    Thats an extra fee you pay if you don't have a full 20% down to cover the lenders risk of you defaulting.   However I've also recently heard of Lender Paid Mortgage Insurance (LPMI) as an alternative.   The "lender paid" part sounds good, right?    But of course its not free.  

Basically LPMI is handling the same function as PMI by instead paying through an increased mortgage interest rate rather than a separate fee.    You might get a cheaper mortgage payment this way versus going with PMI.   However since PMI should drop off you may pay more in the long run with LPMI.

I'm not going to try and reinvent the wheel here, so here's 3 good articles on the topic :

Bankrate Lender-paid mortgage insurance: Pros, cons
Bigger Pockets  What Is LPMI? Lender Paid Mortgage Insurance
Wells Fargo Lender-Paid Mortgage Insurance (LPMI)

You might want to go with LPMI if you're in a higher tax bracket and you might move or refinance or pay off the loan before the full term of the loan.

PMI is likely better if you plan to stay in the home and keep the original mortgage long term.


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Best of Blogs for Week of May 22nd

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

Glassdoor compares How 50 Cities Compare for Jobs
If you sort the first column 'hiring opportunity rank' then that will compare the # of jobs versus population.  Note its just based on postings on Glassdoor so it may be skewed but probably pretty good reflection of overall market I'd think.

The Big Picture shares : Stovall: Inflation/Rate Adjusted Stocks Don’t Look Expensive
Of course its just one perspective, but I think it makes some sense.   If inflation is low right now its more likely to be high in the future.  That would, we could assume, mean higher prices and therefore higher revenues in the future.  

Planet Money answers the question Will Your Job Be Done By A Machine?   for a variety of occupations.    I for one welcome our future robot overlords.

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Fewer People Are Working Two Jobs

I worked two jobs for a few months back in college once.   I didn't have a compelling need to do it but I seemed able to manage it and I guess I just wanted the extra money.   I'm proud to say I got straight A's that quarter in college.   I honestly think having to work that much and go to school full time forced me to be a better student.   With such little free time I had to manage my time better to get my school work done.  When I had more free time I had more of a tendency to goof off more as there was ample time to fill and that just turned into more goofing off and procrastinating and homework didn't always get done when it should.   What... what was I talking about?   Oh... yes having two jobs.   Some people do that and I'm assuming most people working two jobs do it because they need the money.  But only a few people really work two jobs and the numbers have been dropping.


The BLS article Multiple jobholding over the past two decades  has the data in graphic and table form.   You can go to their site to see specific dates if you want details.   But I've copied the graph from their site here so we can see the trend :

(click image for full size)

The rate has been going down mostly for the past 20 years.   The rate peaked at 6.8% in 1995 and was down to just 5% as of the end of 2013.   Doesn't seem like the recession had any substantial impact on the trend either.


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Best of Blogs for Week of May 15th

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

DoughRoller tells us about 10 Personal Finance Myths Busted

TheBigPicture shared Business Booms and Busts which has a graphic showing the economy cycles from 1775 to 1944

Found TheBigPicture, Trulia has an interactive graphic comparing Rent vs. Buy: Which is Cheaper for You?   It determines which is cheaper in general for major cities and has a few variables to play with.

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