Monday, February 5, 2007
It certainly may. There is a particularly important down payment threshold with respect to financing. With a penny less than 20% down, you are in different territory. For many years, less than 20% down meant that the borrower had to pay PMI (private mortgage insurance), in addition to the principal and interest payment on the loan. This PMI is insurance for the lender, but is paid by the borrower and can be hundreds of additional dollars per month. It depends on the loan amount, down payment, and specific loan program. Note that as of January 2007, PMI is tax deductible, subject to some qualifying requirements, as is a portion of your mortgage payment.