 TITLE: Do You Really Need Mortgage Insurance? CONTENT: Can You Avoid Mortgage Insurance?\n---------------------------------\nAfter analyzing the costs, you may find that it's in your best financial interest to offer a lender 20% of the purchase price as a down payment after all. You'd avoid the extra expense associated with mortgage insurance, and the monthly payment will be more reasonable. To make it happen, develop a plan that will add to your income and decrease your expenses so you can save the necessary amount for your goal. Other methods include borrowing from your retirement plan or a relative, or selling unneeded but valuable assets.\nIf you don't want to delay homebuying and you're comfortable paying the extra costs with mortgage insurance or funding fees, it can also be a wise decision. Maybe you've found a piece of property that's too great of a deal to pass up. There is good news if you use PMI for your conventional loan because the premiums won't last for the life of the mortgage. After you accumulate 20% in equity, you can ask your lender to stop the policy. If you don't reach out to the lender, the insurance will automatically end when your home reaches an equity level of 22%.\nAs for FHA loans, there is a benefit to coming up with a down payment of at least 10%. The mortgage insurance will stop after 11 years, and at that stage your payments will be lowered. If you don't put that much down, though, the insurance will continue until the loan is paid in full.\nBuying a home is an exciting, if not expensive, venture. If you want to start with no or little money down, mortgage insurance or funding fees may be right for you. Then again, you may prefer to wait until you're in a stronger financial position with the full down payment ready to go. The choice is yours.\nWhichever direction you choose, obtain your free credit report with Experian long before house hunting so you can clear up any errors you may find and strategically add attractive information to increase your credit score. Doing so will lower the cost of PMI and possibly help you qualify for a lower-interest mortgage. END