There are plenty of ways to get the home you want with a low down payment. One way is by using private mortgage insurance (PMI). You see, a lender's risk is much greater on a mortgage that's more than 80% of the value of the home-PMI offsets the risk by insuring the money your lender has paid out. On a $180,000 home with 5% down, a PMI
premium adds about $108 to monthly cost.
Many lenders also offer a "financed premium" mortgage that rolls the total cost of your mortgage insurance into the full term of the loan. Al-though the premium is paid off more slowly the monthly payment is much less. An advantage to this kind of mortgage insurance is that if you sell the home before it's paid off, some of the premium may be refunded. Another way to buy a home with a low down payment is with an 80-10-10 mort-gage. You put down 10%, take out an 80% primary loan and then get a second mortgage for the remaining 10%.
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