Source: CNET —
If you make aof less than 20% on your home, you’ll probably have to purchase private mortgage insurance. When you make a smaller down payment, lenders tend to consider you a , and the PMI requirement protects your lender in case you default on your loan.
Although PMI makes it possible for prospective homeowners, especially first-time buyers, to qualify for a mortgage with less than 20% down, the monthly premium will add hundreds of dollars to your mortgage payment every month — so make sure to account for this expense when figuring out your. PMI is required for conventional loans and FHA loans, but some , like , do not require it.