If the thought of trying to save 20% for a down payment has been keeping you on the homeownership sidelines, here’s some good news. With private mortgage insurance (commonly referred to as “MI”), you can get a mortgage with a much smaller down payment.

On a $200,000 home, for example, you could qualify for a mortgage with as little as 3% or $6,000 down if you have a loan with MI. That is much easier to save than the 20% or $40,000 that would be required for a loan without it.

Why Mortgage Insurance (MI)

MI helps borrowers’ access homeownership sooner. Essent MI can help homebuyers buy a home now with as little as 3% down and start building equity faster, rather than waiting to save 20% down. Check out our free online tool, EssentIQ^®, to see the opportunity cost of waiting to save 20% down vs. buying now.

MI has flexible payment terms. There are a number of ways you can pay your MI premiums. Essent offers borrower-paid MI (BPMI) standard and deferred monthly plans, as well as a single-premium option. Lender-paid MI (LPMI) plans are also available. Read our PMI Q&As to learn more.

MI can be removed. Unlike FHA, you can ask your loan servicer to cancel your BPMI when you reach 20% equity in your home; BPMI automatically cancels when your equity reaches 22%. Removing BPMI can reduce your monthly mortgage payment or result in partial refund of your MI premiums, depending on the premium plan you selected. Read How To Remove PMI to learn more.