The lender can significantly impact the cost of PMI. PMI varies by lender, with some charging more than others for the same mortgage insurance. Here's why.
The lender chooses the PMI company from their list of approved providers. There are seven PMI companies in the U.S., each offering different rates. Still, most lenders use only some of the PMI companies. And when they don't compare PMI rates with all seven, they're likely to miss the lowest. As a result, you get stuck with higher monthly payments.
Unfortunately, most homebuyers accept the lender's PMI without knowing that the same PMI may cost less through a different lender.
Although you can't shop for the cheapest PMI directly through the PMI companies, you choose the lender offering the PMI. Before deciding which lender to use for your home loan, compare how much they charge for PMI. This way, you know you're paying the right amount.