 TITLE: What Is Private Mortgage Insurance? CONTENT: What to Consider Before Choosing a Loan With PMI\n------------------------------------------------\nPrivate mortgage insurance can be a great means of getting into a home without having to scrape together a full 20% down payment. If you're ready to own a home, you don't see a 20% down payment as a reality anytime in the near future, and you're willing to pay the cost of PMI to get into a home, it could be a good choice for you. But it's not an expense everyone chooses to take on.\nFirst, it's an extra cost that adds to the price of owning a home. If you're already worried about ongoing loan payments and other homeownership costs, PMI could increase that stress.\nIf you want to avoid PMI, you can take the following actions:\n*   Seek government-insured loans issued by the Federal Housing Administration (FHA) or U.S. Department of Veteran's Affairs (VA). Each has significant borrowing restrictions, but if you qualify, you can avoid PMI.\n*   Save up until you have 20% of the purchase price to put down on a loan, recognizing that in some markets, housing prices will be rising as you save. So in another year (or another five years), the cost of homes like the one you seek will be proportionally greater, and so will the sum that constitutes 20% of their value.\n*   Use savings you already have as a down payment on a smaller loan. If you've saved enough, consider purchasing an older or smaller home in your area, looking around in other markets where housing costs are lower, or perhaps investigating condominiums or co-op apartment units. Getting into less home than you want right now might require some compromises, but it could also set the stage for trading up to a bigger property within the next five to 10 years. END