My understanding is that if you have a conventional loan you can get rid of the PMI when you have 20% equity but if you get a FHA loan that the PMI is continual for the life of the loan.
Perhaps the best way is to see which way causes your payment to be lower and for how long (you did not say what the loan amount or PMI amount was) and then review the type of loan you are obtaining. At that point you can make an educated decision on which one is best for you.

i'd process the pmi and once the loan to value reaches 80% , request in writing to have the bank reappraise the home~ if all works well, meaning good pymt history ets, the pmi can be removed~
hawa
716~832~3300 ext 210

a quarter more of interest does not seem fair, that for the life of the loan.I would pay PMI or pay a point to bring your interest back down. You can also negotiate you deal in a way that the seller can pay the point and this way you dont have to come up with cash out of pocket.
If you want please call me and I can help you structure something that will make sense.

With 15 % down in a soft market I would personally take PMI and then apply to get rid of it once I have an 80 loan to value. However, make sure you can get PMI (or even lender-paid PMI, which is what you are referring to with the extra.250 point) because the Mortgage Insurance market is extremely tough right now which is one of the reasons many more people are turning to FHA financing.

Ruth Bonapace
Bank of America Home Loans

That depends on your tax bracket and what you want to accomplish. In the past PMI was not a deductable expense, unlike interest. Ask your tax advisor. Also, PMI doesn't automatically drop off and the house has to appreciate, you have to prove it appreciated, and then you have to request it to come off. Check what the language is on the PMI you are offered.

Dear Daisy10,
Call your loan officer and have him/her run an spreadsheet with the 2 possibilities. It should not take him/her long since the computer will do it. Review it and remember you can get rid of PMI once you have 20% in equity on the house. Good luck.