What is mortgage insurance
Mortgage insurance(MI)is required for loans with less than 20% down. it is provided by private mortgage insurance companies to protect the lender in the event the Borrower defaults on the loan. On Conventional financing, the MI typically will automatically drop of at 78% of the original purchase...

can the buyer pay the down payment directly to the seller?
If the down payment funds are well documented, then yes, such as in the case of a Lease-Option where the down payment was paid at the beginning of a lease, however, if it is at the time of purchase, it may be better to park the down payment at a 3rd party Escrow and Title company until the purchase/loan is...