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Why you should pay down your low-interest mortgage
I got a guaranteed return of 10.66% by paying down my low-interest mortgage to eliminate PMI.
Lenders typically require private mortgage insurance (PMI) on loans where the borrower’s down payment is less than 20% of the home’s value. Spending hundreds of dollars for an appraisal, on top of paying for PMI, felt like throwing good money after bad. This means that by paying down my mortgage to remove PMI, I’d get a guaranteed return of 10.66% on the money I used to make the extra payments.
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