How can I avoid paying private mortgage insurance (PMI)?

Real Estate, Insurance
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5 days ago
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The easiest way to avoid the extra cost of PMI is to put 20% of the purchase price down on your home. Also, sometimes a mortgage lender will waive PMI regardless of the down payment amount by rolling the life of those extra payments into the loan itself -- this is called lender paid mortgage insurance (LPMI). LPMI means you are essentially paying a higher interest rate than you otherwise would have, therefore, it's not an ideal option if you are buying your "forever home." However, LPMI is worth considering for shorter periods of ownership -- 5 years or less. Either way, have your mortgage lender or financial advisor run the numbers to see what makes sense. The last option is to do a simultaneous 1st and 2nd mortgage with your lender and have the 1st mortgage be 80% of the purchase price, and the remainder goes on the 2nd mortgage. 

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