Question:

How can I get cheap mortgage insurance?

Answer:

Cheap mortgage insurance is possible if you are making a larger down payment. It will vary among insurers and mortgage insurance plans but basically, if you put down 3%, your PMI may be over 0.85% of the annual loan, compared to only 0.5% if you put 15% down.

Private mortgage insurance is needed in the case the borrower defaults and the lender will be reimbursed for up to 20% of the loan amount depending on the case. A way to go cheap and avoid mortgage insurance is to get a second mortgage to cover for the difference, using an 80/10/10 plan in which you are contributing 10 percent towards the down payment, and a second lender is lending 10%. However, if you are doing an 80/15/5 and only 5 percent are going towards the down payment, you may get higher rates and fees.

Even if you are unable to get a cheap mortgage insurance, you can request PMI termination when you reach 20 percent equity, or the lender will terminate it anyways when you reach 22 percent of equity.

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Common misspellings: mortage and morgage