Are there Alternatives to Private Mortgage Insurance?
The alternative for home buyers without a down payment of 20 percent or more was to do an 80 percent first mortgage with a 10-20 percent second or home equity line of credit or home equity loan. As second mortgages are at higher interest rates than first mortgages, home buyers faced higher loan payments. However, at least the interest was tax deductible whereas private mortgage insurance was not. So if you currently hold private mortgage insurance on your home, you should see an average tax savings between $300 and $350 beginning in 2007. Also, remember if you have private mortgage insurance and your home equity has built up to the point where your current loan is 80 percent or less of what your home is worth, you should request your lender to reevaluate your loan to see if PMI can be removed. Either way, 2007 will be a better year for those who hold home mortgages. About the Author Sheryl Landrum is a Senior Loan Officer with First Capital Mortgage in San Diego and Prudential Realty i
