Private mortgage insurance is making a comeback.

Until six or eight months ago, private mortgage insurance was out of favor as people eager to get into the roaring housing market took adjustable-rate mortgages or “piggyback” loans or some other exotic form of financing. But as the market has cooled and lenders have tightened their standards, many people who want homes, especially first-time home buyers and those with little money for down payments, are choosing traditional fixed-rate mortgages backed by private mortgage insurance, or PMI.

The insurance costs the borrower a monthly fee, typically a set percentage of the total mortgage loan. If the borrower can’t repay the loan, the insurance kicks in and the lender gets some of its money back. Because of the guarantee, lenders are more willing to write the mortgages.

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Of the million or so hurdles you can encounter between you and your first home, the down-payment hurdle can sometimes loom the largest.

Lenders can make it easy to buy a house without the traditional 20% payment, but that doesn’t mean doing so is always to the advantage of the new homebuyer. As you’ve doubtless been reading lately, lenders such as New Century and Accredited Home Lenders (Nasdaq: LEND) helped lots of buyers get into a home, but now many of them are facing default and potential foreclosure.

So let’s look at five reasons why it’s better for your pocketbook if you scrimp and save and delay your home shopping until you can make that traditional down payment.

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This month, the mortgage payment on Booker’s Chicago home rose $200, to about $1,300. It’ll go up again in September. He wants to refinance, but he fell behind on payments after his wife died of cancer in 2005, so no lender wants to take the risk.

“I’m just trying to hold onto my house until I can figure out something else to do,” says Booker, 58, a former rail-car inspector who’s on disability.

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