Mortgage. In a year of restored deductibility.

Trying to time the rate market is roughly as hard as timing the stock market — and for most buyers, the price you pay for the house matters more than the rate. A 50bp lower rate on a house you bought for $40K more isn’t a win.

That said, you don’t have to choose. The “date the rate, marry the house” approach: buy when the right house comes along at a price you can afford, and refinance when rates drop. Housing economists expect 6%+ rates through the end of 2026 — but the difference between 6.5% today and 5.5% in 2027 is about $200/month on a $400K loan, recoverable through a future refi.

The exception: if rates dropping would meaningfully change which houses you can afford (because DTI is your binding constraint), waiting may make sense. Use the affordability calculator to model your DTI at different rate levels.

It’s a factor, not a deciding one. PMI typically costs 0.5–1.5% of loan amount annually — for a $500K loan, that’s $2,500–$7,500/year. Even fully deductible at a 24% bracket, that’s only $600–$1,800 in tax savings.

The deciding factor is usually the opportunity cost of the additional down payment. If you put 10% down instead of 20%, you keep $50K (on a $500K house) invested. At a 7% average market return, that $50K compounds. If you assume the down payment money would otherwise be invested in equities, the math often favors less down + PMI — especially with PMI now deductible.

That said: less down means a higher loan balance, more interest paid over time, and you don’t reach the 78% auto-cancellation LTV as fast. The right answer depends on your discipline (would the saved $50K actually get invested?) and your risk tolerance.

Yes — for 2026 forward, you can deduct PMI premiums on any qualifying acquisition debt, regardless of when the loan originated. You don’t need a “new” PMI policy. The premiums you’ve been paying all along become deductible starting tax year 2026.

What changed isn’t the loan; it’s the federal tax treatment. OBBBA reinstated the PMI deduction that had expired after 2021. Look at Box 5 of your 2026 Form 1098 next January — that’s where the deductible PMI amount appears.

Two caveats: you have to itemize (not take the standard deduction) to claim it, and the AGI phase-out kicks in starting at $100,000 (full deduction lost above $110,000 for both single and joint filers, per current IRS guidance).

No. Interest on home equity loans and HELOCs is deductible only if the proceeds are used to “buy, build, or substantially improve” the home that secures the loan. This rule was set by TCJA and OBBBA made it permanent.

Using HELOC funds for credit card payoff, tuition, medical bills, investing, or general spending — interest is not deductible. The IRS expects you to be able to trace the use of proceeds if audited. Mixing uses creates a deductible portion and a non-deductible portion.

The arithmetic still might work — HELOC at ~7% beats credit card debt at 22% even without the deduction. But don’t expect the tax break.

Plan on 2–5% of the loan amount as a working estimate, with the spread mostly explained by state and lender. On a $400K loan, that’s $8,000–$20,000 — significant.

The big components: origination fees (~0.5–1%), title insurance ($1,500–$4,000, varies wildly by state), recording and transfer taxes ($500–$5,000), appraisal ($500–$700), prepaid taxes and insurance ($2,000–$8,000 depending on rates and dates), and per-diem interest from closing to month-end.

Get the Loan Estimate within 3 business days of applying. It’s a federally-standardized form — comparable across lenders. Variance between lenders usually comes from origination/discount points and the title services you can shop separately.

It depends almost entirely on what you’d do with the difference in payment. 15-year mortgages run about 50bp lower than 30-year (6.0% vs 6.5% currently), but the monthly payment is meaningfully higher.

The classic argument: force yourself to pay off faster, pay less interest over the life of the loan. The counter-argument: take the 30-year, invest the difference at expected 7%+ returns. The math favors the 30-year if you actually invest the difference; favors the 15-year if you’d otherwise spend it.

The unspoken consideration: a 15-year mortgage commits you to the higher payment. A 30-year with extra principal payments achieves a similar effect but gives you the option to drop back to the minimum if needed. For most people, the optionality is worth more than the 50bp rate difference.

Conventional: Fannie/Freddie loans, ~3% minimum down (or 20% to avoid PMI), 620+ credit typically, standard underwriting. Best rates for borrowers with strong credit and meaningful down payment.

FHA: 3.5% down with 580+ credit (10% down with 500–579). Lower credit threshold than conventional. Mortgage Insurance Premium (MIP) is required for the life of the loan in most cases — there’s no PMI auto-cancellation. Better for borrowers with weaker credit or limited down payment, worse for everyone else.

VA: For eligible veterans and active duty. 0% down, no PMI/MIP, just a one-time VA funding fee (1.25–3.3% of loan, financed). If you qualify, this is almost always the best product. Often the rate matches conventional or beats it.

The deciding question is usually which one you qualify for. If you have VA eligibility, use it. If you have strong credit and 5%+ down, conventional. FHA is the right answer when your credit or down payment situation doesn’t support the other two.