Until very recently, the only way to borrow more than 80% of the value of your home was to pay an extra mortgage insurance premium each month on top of your regular mortgage payment, or to arrange for a "combo loan," commonly called an "80/20."

Lender Paid Mortgage Insurance allows you to pay any applicable mortgage insurance premium directly, which means all you need to pay is your one mortgage payment, instead of one mortgage and one insurance payment or two separate mortgage payments.

In order to obtain LPMI instead of traditional private mortgage insurance, your interest rate will be increased slightly. By paying a little higher interest rate and no mortgage insurance, you will save money on your monthly mortgage payment as there will be no PMI added on to your payment.

In addition to the common 80/20 loan, many lenders now offer a 75/25 mortgage program, which usually has a slightly lower interest rate.