If your down payment is less than 20 percent, you may be required to purchase mortgage insurance. Mortgage insurance lowers the risk to the lender of making the loan, so you can qualify for a loan that you might not otherwise be able to get. However, it also increases your monthly payment and the overall cost of your loan. The type of mortgage you get determines the cost of mortgage insurance you’ll be required to purchase, and how you pay for it.
Once you’ve built enough equity in your home, you may be able to cancel your mortgage insurance. Ask your loan officer for details.
