Wondering what you guys think about paying down my principal to get rid of the PMI on my loan.
The PMI is around $70 per month and if I continue to pay it down through my normal payment I will be down with PMI and about 4 and a have years and will have paid $3700 toward PMI. I was thinking if I took the 18%, I'd need to earn over 4% over the next 4 and a half years to earn $3700. So I'm wonder, is this is a sound investment? Not only do I "earn" the $3700 for the "investment" of getting rid of the PMI, but it will be also equity I have in the home which I won't have to pay interest in later. Seems like a win-win.
I guess the only real concern is this would be taking about 25% of my available cash. But I max out my 401k and if I wanted to invest some cash, this seems like a better move than the market. Maybe I'm crazy!
Thanks for the help.
p.s. Also considering refinancing my loan from 4.375 to 3.875, this is what got me thinking about doing this, maybe as part of the refinance.