By Lisa Prevost | The New York Times
Private mortgage insurance is the bane of homebuyers who can’t put down at least 20 percent. The insurance protects the lender in the event that a borrower defaults on a property with little equity, but it also guarantees a considerably higher monthly mortgage payment.
An increasingly popular alternative allows borrowers to buy out of that monthly burden, however. With single-premium mortgage insurance, the borrower makes one lump-sum payment upfront.