Home Buying: You Don Have to Pay PMI or Private Mortgage Insurance
(Continued from Page 1) • A Piggyback Loan: This is a popular way to avoid Private mortgage insurance or PMI. A Piggyback loan is where you can take 80% of the purchase price and put it on a traditional mortgage and take the remaining 10% and place it on a second mortgage. Although your second mortgage may have a slightly higher interest rate you may save in the long run because now all of your loan will be tax deductible and if you pay off your second mortgage early, you will dramatically lower your monthly payment. • The Finance Single Premium Option: This option for avoiding PMI was a response from the mortgage insurance industry because of the great amount of homebuyers choosing the above piggyback loan instead of PMI. With this option your monthly payments can be lowered to the same monthly payments as if you obtained a piggyback loan. • No-PMI loans: These loans will carry a higher interest rate but will not require you t
