But it almost didn't happen. When we finally found the home of our dreams, the asking price was higher than what we could afford. Even after negotiating a lower price, we were still short of the 20% down payment required by the lender. Neither of our mothers were in a position to help us out and we wanted to avoid taking out a second mortgage to make up the difference.
It felt like our dream was slipping away until our realtor told us about private mortgage insurance. PMI is a financing tool that assists home buyers who don't have the full cash down payment by securing the mortgage loan. Thanks to mortgage insurance we were able to buy the home we fell in love with. We did not have to walk away and wait until we until could save more money. Our mortgage insurance premiums were tax-deductible which is another reason it was an attractive option for us. Plus, we could cancel the insurance once we built enough equity. It was win-win for us and our lender.
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