With today’s different mortgage programs, you can find lenders who require a down payment of 5% or less of the purchase. While other lenders require a 20% down payments giving you more equity in the home from the start while meeting the mortgage insurance requirement. Generally, loans that are acquired with less than 20% require an insurance policy to secure the loan for about 2 years.
The cost of PMI increases as your down payment decreases. Example: The cost of PMI on a 10% down payment is less than the cost of PMI on a 5% down payment. Your PMI premium is normally added to your monthly mortgage payment.
