Mortgage insurance paid upfront

mortgage insuranceBy 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.

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