What Are 3 Simple Ways to Avoid PMI?
- Buy A Home You Can Afford – You are more likely have a down payment of twenty percent. You are also more likely to build equity quickly and be able to get rid of PMI sooner if you buy a house that you can afford. Don’t try to “keep up with the Joneses” – they are probably up to their eyeballs in debt.
- Borrow Your Down Payment – If you can borrow the twenty percent for the down payment, you can avoid PMI. Get creative and ask family or other resources. The interest rate on the loan will undoubtedly be far lower than the PMI.
- Use Two Loans – A great way to avoid PMI is to take out two mortgage loans when you buy a home. Your first mortgage is for eighty percent and the second mortgage is for twenty percent. With this great solution, you avoid PMI and you can pay down but keep your equity line open. This gives you low interest flexibility for future home improvements!
