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A Question for Diane K.

Discussion in 'Asset Protection/Taxes/Legal' started by palazzi, Mar 5, 2008.

  1. palazzi
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    palazzi PARKED

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    I'm buying an investment property, and the lender is offering me the following options:

    1) 10% downpayment with PMI.

    2) 10% downpayment with 2 fix loans, so I don't have to pay PMI.

    Question: Is the PMI tax deductible?

    Thank you.
     
  2. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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  3. EasyMoney_in_NC
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    Like my wife always asks me......
    "why do you want to spend $100 to hope to save $30?" Take the 2 loan route, PMI is a waste and you'll need to appreciate past 80/20 LTV (and prove it via appraisal) to lift it (more $$)
    Take the loans and refi some day if thats what makes sense. Of course you didn't tell us the terms of these two loans but..........
     
  4. Corrado79
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    Corrado79 New Contributor

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    Good advice, I would just point out one thing. If you go the PMI route, you only need an appraisal (once the LTV reaches 80/20) to remove the PMI. But if you go the 2 loan route, you will need to refinance to remove the 2nd loan. That is much more costly than an appraisal.
     
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    palazzi PARKED

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    Thank you all of you for your prompt response, and wise advise.
     
  6. AroundTheWorld
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    AroundTheWorld Be in the Moment Speedway Pass

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    This is an old post, and probably not relevent to this individual anymore, but in a situation like this - - - you would also want to look at interest rates.
     
  7. EasyMoney_in_NC
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    Typically I'd say fair enough :) but in todays RE perfect storm, I wouldn't think that "appreciation" will happen (any time soon) to the point the 80/20 eliminates the PMI. Also the monthly money spent on PMI would probably pay for the closing costs of refi'g down the road (doesn't PMI still require 2 years before it can be waived?)

    What it comes down to, is working out the monies to see which way is the best bang for the buck (calculating payments, rates, time frames etc...)

    I realize this thread sort of died, but maybe someone else could gain from it?
     

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