Skrepka, I don't have the answer for you, but try posting this on Home Buying and Selling forum. I'm sure you'll get lots of responses.

This really depends on your financial situation. If the interest rate is favorable and you can afford to pay the HEQ loan off fairly quickly with no penalty then it will probably be cheaper than PMI. In addition, unless you are in a very high tax bracket or do not itemize your return, interest on that second loan may be tax deductible therefore lowering actual net amount paid. We took a HEQ out when we bought a new home last spring to avoid PMI. We are paying extra on it each month and should have it paid in about 5 years versus the 8-10 years the average home owner pays PMI. Whether this is the route you need to take is based on your individual factors. I suggest you go to some of the banking websites such as bankrate.com or cnnmoney. I found these invaluable resources when contemplating my own situation.

PMI, in my opinion, is never better. It is a ripoff, and does not insure YOU against anything. A mortgage w/PMI should only be a last resort, and I admit such a mortgage may be better than renting for some people.
When interviewing lenders, ask them how you can avoid PMI. That always worked for me!

If this is mortgage insurance that you're talking about, please remember that the amount being insured is the decreasing value still owing on the mortgage. And the payee is the lender.

Many people in such a situation have several people dependent on them for ongoing income, which disappears if they die.

Which means that the family has need of assets, as well.

So they choose to arrange their own life insurance (usually term, to be at higher values in the earlier years when the need is greatest, and rates lowest), almost always for a larger amount than the original amount owing to the mortgage lender.

The amount of the insurance stays constant throughout the term of coverage - which means that a decreasing amount would fully retire the mortgage, if the survivor chooses, leaving an increasing residue for the surviving family. The amount of coverage can be adjusted at the end of the term, as desired.

And the payee is the surviving owner of the home.

Even worse than possible death is the possibility of disability, as it happens more frequently. And if a major breadwinner (or stay-at-home-parent) should become disabled, the person with the disability is one more mouth to feed, and may have medical/rehab costs, as well.

It would be wise to carry some disability insurance as well, I think.

Just some ideas that you may wish to consider.

ole joyful

I think that a 30 year is a waste of money perhaps look at a 20 year fixed, it will have a lower APR and is only a few more dollars per month. Look at the amortization charts on bankrate.com.

I got my loan through Regions Bank, and they still have the deal that I got.
100% over 30 years with no PMI.
It's a special that they've had for at least the last 2 years.
My intrest was really low as well.
good luck

Hi bushleague,

I think that a 30 year is a waste of money perhaps look at a 20 year fixed, it will have a lower APR and is only a few more dollars per month.

Wow! A 20 yr is an even HEAVIER waste of good money! It ends up devouring more good investable principle far faster than a 30 year term, and offers extremely little discount in return.

About the best thing to say about a 20 yr term is that it forces irresponsible people to send their money back to the bank, at the threat of losing their home if they don't.

Happy New Year!!!
Dave Donhoff
Strategic Equity & Mortgage Planner

Okay Dave we all have different investing styles, let's hear
yours before I buy this next foreclosure since the young couples' 30 ARM turned into a 12.75% APR nightmare! When you're finished I'll sit you down and show you some real numbers, how they work for some, why they cannot work for others (the bulk of us).

Not that I have a dog in this fight, but, bushleague, an ARM is a whole different deal. Dave is talking about fixed-rate mortgages. You know there's a difference. You also know there are people who get in over their heads regardless of the interest rate.

Bushleague,

You mentioned nothing about "investing styles." You specifically said a 30 year term wastes LESS money than a 20 year term. You even ACKNOWLEDGE that a 20 year term accelerates the amortization, reducing your working funds faster, and trapping them within the risk of the real estate itself.

THAT is what I challenge!

So... where are your numbers otherwise?

Dave Donhoff
Strategic Equity & Mortgage Planner