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Borrower Paid Single Premium quoted at 4.26% for 95% LTV.

or should i do a piggyback 80-15-5.  rate is 7% for the 2nd.
also got options to split the PMI, like the FHA does.  0.93 and 0.82
 i know the calculations so please tell me, what options give me the biggest bucks. i want to keep the home for 15 years, and also want tax incentives. is MI still deductible 2012 tax laws?

Thanks
  • August 20 2012 - US
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Answers (2)

I am assuming that the rate is 4.26% because the lender credit associated with that higher rate is going to pay the mortgage insurance premium?   If that is the case, then 4.25% is not a bad rate.  

If you can still find a lender to do 80-15-5, then you will probably get a much better rate on the 1st mortgage.   7% is also not a bad rate for a 95% CLTV 2nd.

Mortgage interest is deductible, while I don't believe mortgage insurance will be allowed as a write off for 2012.

If it were me, I would go with the 80-15-5 option. It should get you a lower rate on the 1st mortgage and more tax writeoffs.
  • August 20 2012
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At that premium, I am guessing you are looking at FICO scores under 680.  Couple of questions

1. Are you sure you can get the second for the piggyback
2. What rate are you being offered for the first

Even with the recent spike in rates, you can still get 3.25% on a FHA loan.  Yes the MI is higher but it does eventually go away which you will benefit from given your time line and I would be wary of the other offers if your scores are what I think they are.
  • August 20 2012
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