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Mortgage Library: Ask a Mortgage Related Question: Answers: Avoiding PMI
I'm currently in the process of refinancing my existing mortgage. To avoid a PMI premium my broker is offering two loans to stay under 80% borrowing vs. home
value. The first loan is 6.1%, the second smaller loan is 8.1%. Is this a normal practice and is this a good practice. My home value is $250,000 and the loans
are for 230,000. My credit score is average 750.
There are many options to consider when refinancing your home. Some loan programs do require PMI when your financing exceeds 80% of
the value of your home. Other options include paying the PMI in one lump sum up front or going through Alternative programs that simply offer a slightly higher
rate to offset the mortgage insurance.
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