PMI or mortgage insurance is standard for loans where the loan-to-value ratio is greater than 80%. When your loan ratio goes below 80% then you can discontinue the mortgage insurance.
PMI rates vary based on your credit, the down payment, and the size of the loan—some borrows will have to continue to pay PMI since they have a poor credit history or have made a lower down payment.
Points are given to balance out a loan rate. If a borrower wants a mortgage at a lower interest rate, the lender might work with the borrower by giving the lower rate but requiring the borrower pay an upfront fee in the form of points. Four points is usually to half a point. As a borrower you’ll need to figure out how much you’re saving or losing via points over the life of the loan in terms of interest.
TIP: As far as tax deductions, for PMI, which you have to pay if you don’t pay 80% of the loan, is not deductible. Usually if you put 20% down you can avoid paying PMI. But the interest on your mortgage is deductible.
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