(April 11) -- Homebuyers can skirt the need for private mortgage insurance by securing a second loan--either from the seller or from another lender.

Although lender requirements differ, buyers usually can combine a 10 percent downpayment of their own with a 10 percent second loan from the seller. However, Fannie Mae and Freddie Mac lenders typically require a 10 percent downpayment and a 15 percent second loan from the seller, or 15 percent down and a second mortgage for 10 percent of the purchase price.

Because lenders are not likely to offer a second mortgage at a competitive interest rate, buyers should try to come up with a 20 percent down payment by borrowing money from a relative or employer or by selling assets.

Source: Inman News Features Online (04/10/02)