Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I see lots of folks on this forum knocking those who can't afford the 20 percent on the house. When I financed my house, I did the lender paid PMI. I put down a little over 6 percent on the house. PMI for the 14 percent was going to add about 65 dollars. Lender paid PMI added about 25 dollars. While PMI eventually will go away depending on if one pays extra or the house appreciates, the higher interest rate of the lender paid PMI doesn't eve go away. However, I don't have to worry if congress wants to make PMI tax deductable or not. The higher interest I'm paying is always tax deductable. At least for the next few years, the extra interest I'm paying for lender paid PMI almost pays for itself.
Except a tax deduction doesn't really help all that much. I don't know how much higher your interest rate is, but I figured out at a $300,000 loan, I think 0.2% ended up being close to $7000 over the coarse of the loan, I'd bet the pmi rate is closer to half a percent. In my case, that ended up being a total of 4 years of PMI payments. As it is, we expect our loan to be at 80% LTV in about a year and a half (high appraisal helped). Granted, most people wont stay in one house, or have the same mortgage for the life of the loan, but PMI works out for me.