PMI or pay down

[Alicia McElroy]

My husband and I are planning on purchasing a fixer-upper in a good neighborhood. Our accepted offer price is $73,500. The most recent appraisal was $99,500 in 2007, before the housing market crashed. We are plan on fixing the house up (paint, new countertops, removing carpet to expose the hardwood floors, etc). We figure with a little elbow grease and we can increase the value significantly. So, just curious if anyone has advice about whether or not to take a conventional 30 yr mortgage at 5% down & pay PMI until we can re-appraise the property in 2 years and have that increase in equity. That way we have a minimal down-payment, and hopefully get an increase in value to meet the 20% in equity that we would need to no longer have PMI. Any suggestions? Also, I've heard that possibly in 2014, the government will no longer allow tax writeoffs for PMI. Anyone have info about this? We are new to real estate investing and could use suggestions. Thanks!