DIYbanter - View Single Post - Avoiding PMI via 80/15/5

(Brian Huether) wrote:

So with the above numbers, what makes sense? It just isn't clear to
me... Should I do what many people do, and just pay PMI, with the
hopes that after the first year the house has appreciated enough to
remove PMI?

With the numbers you posted, the difference in interest is about $7000. The tax
benefit for most people buying that kind of house is approximately 30%, so you
would see a reduction in taxes of around $2000. Property taxes would be the same
for both options, and the benefit from that would be a similar percentage.

If you do go the PMI route, make sure it gets documented in writing taht teh
lender will remove it when a certain percent equity is reached. Otherwise they
don't have to (unless you refinance).