 TITLE: Do You Really Need Mortgage Insurance? CONTENT: What Are the Types of Mortgage Insurance?\n-----------------------------------------\nThere are several varieties of mortgage insurance, and the type you obtain depends on the kind of mortgage you get:\n*   **Private mortgage insurance (PMI)**: This type of mortgage insurance covers a conventional loan you'd get from a bank or credit union. The cost of PMI can range from 0.5% to 2% of the total loan amount per year and usually is paid monthly. The rate you get is based on factors such as your credit score, the loan type, down payment and length of the loan.\n*   **Federal Housing Authority (FHA) mortgage insurance**: If you have low to moderate income, you may be eligible for an FHA loan that does not require the standard 20% down payment. These loans are issued by lenders that are approved and insured by the FHA. Mortgage insurance is required, and it's broken down into two parts. The upfront mortgage insurance premium is 1.75% percent of the loan amount and you'll make monthly payments toward an annual mortgage insurance premium of 0.45% to 1.05%.\n*   **U.S. Department of Agriculture (USDA) mortgage insurance**: Mortgages issued through the USDA, USDA loans are available to certain suburban and rural homebuyers. Although no down payment is expected, a monthly mortgage insurance premium of 0.5% of the loan amount is required.\n*   **Funding fees**: With a mortgage that's guaranteed through the U.S. Department of Veterans Affairs (a VA loan), you have the option to put down less than 20% without PMI, though funding fees are required. These fees protect the lender in the event of foreclosure much like mortgage insurance. If you're in the regular military, the basic funding fee for a zero down payment mortgage is 2.15%, but it will be less if you put some money down. If you're in the Reserves or National Guard, the basic funding fee is a little higher, starting at 2.40%. END