## How Can You Avoid Paying Mortgage Insurance?
Mortgage insurance is a type of insurance that protects the lender in the event that you default on your mortgage. It is typically required if you make a down payment of less than 20% of the purchase price of your home.
There are a few different ways to avoid paying mortgage insurance.
**1. Make a larger down payment.**
The most straightforward way to avoid paying mortgage insurance is to make a larger down payment. If you can afford to put down 20% or more of the purchase price of your home, you will not be required to pay mortgage insurance.
**2. Get a private mortgage insurance (PMI) cancellation policy.**
PMI cancellation policies are offered by some lenders. These policies allow you to cancel your PMI once you have reached a certain amount of equity in your home. The amount of equity you need to have in order to cancel your PMI will vary depending on the lender.
**3. Refinance your mortgage.**
If you have a PMI-paying mortgage, you may be able to refinance your mortgage into a new loan that does not require PMI. To qualify for a refinance without PMI, you will need to have reached a certain amount of equity in your home. The amount of equity you need to have will vary depending on the lender.
**4. Talk to your lender.**
If you are struggling to make your mortgage payments, you may be able to talk to your lender about options for avoiding foreclosure. Your lender may be willing to work with you on a repayment plan or a loan modification.
## Tips for Avoiding Mortgage Insurance
* **Shop around for a lender.** Not all lenders have the same PMI requirements. Some lenders may be willing to waive PMI if you have a good credit score or a low debt-to-income ratio.
* **Get pre-approved for a mortgage.** Getting pre-approved for a mortgage will give you a better idea of how much you can afford to borrow. This will help you determine how much of a down payment you need to save.
* **Consider a smaller home.** If you are on a tight budget, you may want to consider buying a smaller home. This will reduce the amount of your mortgage and make it easier to avoid PMI.
* **Be patient.** Saving for a down payment takes time. Don’t get discouraged if you don’t have enough money saved up right away. Just keep setting aside money each month and you will eventually reach your goal.
## Conclusion
Mortgage insurance can be a significant expense. By following these tips, you can avoid paying mortgage insurance and save money on your monthly mortgage payments.