In case you missed it....Private Mortgage Insurance is tax deductable.

As of January 2007 private mortgage insurance or PMI became tax deductable. Recent legislation has now extended this out to 2014. In the past we would restructure your loan with the first mortgage at 80% of the sale price then adding a second covering all or most of your down payment.

Much has changed. The "purchase money" second pricing is not as attractive as it use to be. You may opt for the first and second loan or (combo loan) for other reasons such as the expectation of a bonus or inheritance to payoff the second mortgage sooner than later thereby reducing your house payment for the long term. (I would invest it but that is another story another day).

If the bonus is not coming PMI may be the way to go. In addtion to the tax deductibility, you do not incur redundant costs such as a second escrow fee and other costs associated with the second mortgage. You don't have to pay thousands to payoff the second mortgage to reduce your payment.

In most instances you are "stuck" with PMI for a minimum of two years no matter what equity position you are in. The servicer of your loan (where you make payments) will inform you of the options available upon your inquiry or click cancel my PMI.

When planning your future it is important to explore all options.