Private Mortgage Insurance (PMI) is an insurance policy that you pay for that could help you finance your home if you have not saved enoguh for your down payment. This much is true; however, Private Mortgage Insurance does nothing more for you the homeowner, except drain your wallet. First, the insurance policy does not protect you at all. This policy you are paying for only protects the lender from certain losses if you default on the mortgage. Lenders like this; however, Private Mortgage Insurance is expensive and you could be required to keep it for a number of years. This insurance alone could raise your monthly payments by as much as $200.

A simple “piggy back” mortgage can help you avoid this monthly drain on your wallet. If you have at least 10% of the loan amount required for a down payment a “piggy back” mortgage can supply the remaining 10%. These loans are called “piggy back” mortgages because they are simply piggybacked on your primary mortgage. You may be able to find lenders willing to piggyback as much as 15% or even 20% of the loan amount for your down payment. Interest rates on these "piggy back" loans vary from lender to lender. You may end up paying a point or two more for this loan; however, the savings compared to what you would pay in Private Mortgage Insurance premiums make this well worth your while.

Private Mortgage Insurance is a trap many homeowners fall into because they don’t take the time to explore other options available to them. Don’t let this happen to you.

Louie Latour has twenty years of experience in the mortgage industry as a mortgage broker. He is the owner of Mortgage Refinance Advisor, a mortgage resource site devoted to saving homeowners money with a free guidebook "Five Things You Need to Know Before Refinancing a Mortgage." http://www.refiadvisor.com