Yes, you can still buy a home with little or no money down (in fact, Congress is hoping to make it much, much easier, in the near future!).

However, if you do, if you do get a loan for more than 80% of the appraised value, your lender will want you to take out what is known as “Private Mortgage Insurance” (PMI). This is an insurance policy that protects the lender (not you!) from losing its money, if (and when, ha-ha?) you default on your loan.

By taking out PMI, you may be able to lower the interest rate on your loan. (This is if you take out one single loan for the entire amount borrowed, say up to 100%.)

The alternative to PMI is to take out two loans, one for 80% and one for the remainder, up to 20%. The first loan will be at the typical interest rate, the second loan is usually at a significantly higher interest rate, say 2% higher. But, if you take out a second loan, you don’t have to get PMI.

So, you need to do the math to figure out which is going to cost you less, each month.

Also, keep in mind, there are tax implications for both. If you take out a second loan, you can usually deduct the interest paid, on your federal tax return (if you itemize). In the past, PMI was NOT deductible, but a law was passed last year making it deductible, so that benefit is no longer (the law was passed only for loans originating in 2007 and has not been renewed for next year, as of yet).

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Updated: 1st Quarter 2018

Author Profile

John Ford
John Ford

Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs

In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.


For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.


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John Ford and his staff can be reached at 617-595-3712 or 617-720-5454. Please feel free to stop by John's Boston Beacon Hill office located at 137 Charles Street.

John Ford
Ford Realty Inc
137 Charles Street
Boston, Ma 02114



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