How to avoid paying PMI on your mortgage.

• The 80/10/10 or 80/15/5 approach, which stands for an 80% First mortgage, a 10% 2nd mortgage, and 10% or 5% down payment or equity in the property. This is the best method in our opinion and the one we use most often. Since PMI only applies to first trusts or primary mortgages, we structure a first trust to be no greater than 80% of the value of the property, and we then couple that with a second trust for the remaining moneys that are needed. Thereby achieving the total dollar amount needed to make the loan but also waving the need for PMI by keeping the first trust at 80% Loan To Value.
• Finding a lender that will allow you to finance the PMI into your mortgage interest rate. Some lenders will do this and others will not. The idea is simple though. You agree to accept a slightly increased interest rate typically a �% increase in your rate and the lender then pays the PMI for you. The advantage of this method is that the money you would have paid in Private Mortgage Insurance is now a part of your interest payment against your loan and is now tax deductible.