As the housing market improves, buyers can, once again get a low down payment mortgage with as little as 3.5% down. Traditionally a 20% down payment is required for a mortgage. It is virtually impossible for people who are paying rent each month to save up enough for a 20% down payment. For potential homebuyers these lower down payments are a good thing for many people. Depending on your lender and your financial history (especially your credit scores), a lower down payment may mean a higher interest rate. A half percent interest rate can make a difference of nearly $25,000 over 30 years!  

Anytime you put less than 20% down on you home (except with some specialized loan programs; you will have to pay what’s called private mortgage insurance. This insurance goes to a third party, and basically guarantees the Leander that if you default on your loan, the lender will get their money back out of the investment. If you get private mortgage insurance it will cost you anywhere from $50 a month to more than $100, this will be added to your mortgage payments. 

Do you think Private Mortgage Insurance is worth the extra cost?