PMI or higher interest rates? My wife and I took out a loan to purchase our first house about a year ago now, we were given choices of a PMI, or paying a higher interest rate. We purchased a 2yr, three bedroom, 2 full bathrooms house for right under $115,000. The house is a good size for th two of us, we are on the corner so we have a nice looking yard to go with the house. After researching the two and then looking at the numbers we went with PMI as our best choice. Come to find out PMI (Private Mortgage Insurance) can be eliminated after you have build up enough equity in your home. If you decide to take the higher interest rate, you are stuck with it throughout the whole life of the mortgage. You also have to know that everything is probably going to be different with the lenders depending on time period, location you are in, so PMI might not be the best choice for everyone. If you are confronted with the decision between high interest rates and PMI you should evaluate your choices carefully. Make sure you talk to your lender about each and every option. Do not just talk about your options run the numbers so you understand what is going on.

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