What is the most frequently used payment plan for Private Mortgage Insurance (PMI)?

The most frequently used payment plan for Private Mortgage Insurance (PMI) is the monthly premium plan. This option is popular among borrowers because it allows for the cost of PMI to be spread out over the course of the year, making it more manageable to pay monthly rather than upfront. By opting for monthly premiums, borrowers can maintain better cash flow and avoid the immediate financial burden that comes with paying a larger one-time upfront premium.

Additionally, the monthly premium plan aligns well with conventional mortgage practices, where many borrowers prefer to factor in their mortgage insurance costs as part of their monthly housing expenses. This payment structure also facilitates easier budgeting since homeowners can predict their monthly payments more accurately.

In contrast, other payment plans, while available, are less common among borrowers. The one-time upfront plan requires a significant cash outlay at closing, which can deter those who prefer to conserve their savings for other moving or settling expenses. The tiered premium plan, which may adjust premiums based on various factors, is less standard and may not be as straightforward as the monthly premium model.