When it comes to homeownership, borrowers have options. Choosing between a conventional, government, or portfolio product is a decision that requires thoughtful guidance.
As a mortgage advisor, your role is to help borrowers determine which loan program best aligns with their financial goals. While most conversations focus on loan type, the final structure is often driven by key loan characteristics that many borrowers are completely in the dark about.
Mortgage insurance (MI) is very similar. Like loan programs, borrowers need an advisor to help them navigate the different MI options. By doing so, they can better understand the benefit of each product and how it could align with their personal homeownership goals.
Our MI expert, David Showalter, Sales Account Manager at Enact, explores the critical importance of knowing how to present each of the four MI products to your borrowers. Not only does it help you stay competitive in the market, but it’s also the only way to truly act in your borrowers’ best interest.
Mortgage insurance conversations are too narrow
Mortgage professionals guide borrowers through countless decisions: loan programs, down payment options, interest rates, and long-term affordability. Yet when it comes to mortgage insurance (MI), many conversations stop too soon.
Too often, MI is presented as a single, default choice: a monthly premium added to the payment until cancellation. Borrowers expect it. Loan teams are familiar with it. Many mortgage professionals aren’t fully equipped to explain why, when, and how MI can be structured beyond monthly premiums. And as a result, other MI structures are frequently overlooked—even when they could better support a borrower’s financial goals.
When MI is treated as a checkbox instead of a strategy, borrowers miss options, and lenders miss opportunities to differentiate.
The result?
- Borrowers remain unaware of alternatives that could lower their monthly payment or long-term costs
- Loan officers lose a chance to provide consultative guidance
- Lenders compete primarily on rate instead of value-driven conversations
Ultimately, if your team can’t confidently explain all MI options, you’re not just limiting product knowledge. You’re limiting trust.
Understand all four MI products and when to use them
Mortgage insurance works best when it’s explained, compared, and positioned intentionally. Enact offers four MI product structures, each designed to meet different borrower needs and lending strategies. Knowing all four allows you to move from simply quoting MI to advising on MI.
1. Monthly Mortgage Insurance (Monthly MI)
Monthly MI is the most familiar option for borrowers. A premium is added to the monthly mortgage payment and may be canceled once certain equity thresholds are met. From Q1 2024 to Q3 2025, the ever-popular monthly MI premium option accounted for almost 97% of all MI written.
Why it works:
- Easy to explain and understand
- Minimial upfront cost at closing
- Familiar to most borrowers as the industry standard for MI
Monthly MI is often the starting point, but it shouldn’t always be the ending point. Consider all the possible options to best meet your borrowers’ needs.
2. Borrower-Paid Single Premium MI (BPMI Single)
Borrower-paid single premiums are paid as a one-time lump sum at closing. In some cases, the premium may be financed into the loan, depending on LTV and investor approval.
Why it works:
- Results in the lowest final monthly payment
- Can deliver long-term savings at higher LTVs
- Appeals to borrowers focused on cash flow over time
This option can be especially effective for borrowers who play to stay in the home long term.
3. Lender-Paid Single Premium MI (LPMI Single)
With lender-paid single premiums, the lender pays the MI premium upfront and recoups the cost through pricing the interest rate. Like BPMIs, these premiums are also paid as a lump sum, but the main difference is that the lender pays.
Why it works:
- No separate monthly MI line item
- Helpful for borrowers with limited funds (where BPMI isn't an option) at closing
- Popular for portfolio products marketed as "no monthly MI" loan
This structure can support both borrower preferences and lender product strategies.
4. Split Premium MI
Split premiums combine an upfront borrower-paid portion with a reduced monthly MI premium. There are six buy-down options ranging from 0.50% to 1.75% of the loan amount.
Why it works:
- Lower monthly payment than standard monthly MI
- Flexible trade-off between upfront cost and monthly savings
- Similar to buying down an interest rate
Split premiums give borrowers control and give loan teams a powerful comparison tool. The more a borrower pays at closing, the lower the residual monthly MI, and ultimately, the lower the final mortgage payment.
Why MI knowledge helps you win more business
There is no “best” MI product—only the best-fit option for a borrower’s unique goals. Understanding and presenting all four MI structures allows you to confidently:
- Offer transparent, borrower-first guidance
- Build trust through better financial conversations
- Compete beyond rate and fees
As an Account Manager for Enact, I’ve heard countless stories from loan officers who’ve told me that it’s not just the numbers on the page that help them win business, it’s the conversations they have about MI that help close the deal. Better conversations build trust, and trust helps them overcome differences in rates and fees.
In upcoming articles, we’ll take a deeper dive into each of the four MI products and explore when and why one option might be a better fit than another.
The Enact advantage: empowering better MI decisions
At Enact, we believe MI should be a strategic tool, not a default assumption. By understanding how and when to present each MI option, mortgage professionals can deliver stronger advice and better borrower outcomes.
We also offer a suite of tools: including Rate Express®, Underwriting Resources, and other training resources to further help you along the mortgage origination journey. Plus, you can always reach out to your Enact Sales Representative if you need an extra helping hand.
Source: David Showalter is an Account Manager at Enact Mortgage Insurance who works closely with lenders and loan officer to support effective MI strategies and borrower education.
The statements in this article are solely the opinions of David Showalter and do not necessarily reflect the views of Enact or its management. Opinions expressed are for educational purposes only. Always review current, applicable agency guidelines and consult your compliance and legal advisors when exploring MI options.
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