Avoid PMI
The easiest way to avoid PMI is to invest a 20 percent down payment at the time of the loan. Lenders will not require PMI when the loan to value (LTV) is 80% or less. However, coming up with 20 percent down payment is very difficult for many borrowers. Another way to avoid PMI is to apply for subsidiary financing (home equity loan or line of credit) and close it at the same time as your first mortgage. These types of programs are referred to as 80/20, 80/10/10, 80/15/5, etc.
Another way to avoid PMI is to use a subprime or B-Credit lender. These loans will often have higher interest rates, but at least interest is tax deductible (where PMI is not). Find the no PMI program that’s right for you!