In our case, we actually paid quite a bit less than what the home’s worth; we bought it HUD, and the other homes in the area are selling for about 15-20K more than what we paid (we lucked out and saw this the day it was listed, which was the day after Thanksgiving, so there weren’t a whole lot of other people looking). The area’s growing, too, as more people move out of the city, and we have easy access to the main bypass through the city–we’re pretty sure that this area’s going to appreciate at a fairly good rate. We’ve also put some work into it, too. Most if it’s cosmetic stuff (painting and such), but we’re also going to change out some of the original cabinets. We’re pretty sure that, in a year or so, we can get the house re-appraised and eliminate the PMI.
The only 80/20 mortgage that the company I work for (and therefore financed with) had offered a choice between a higher fixed rate or a variable rate. We didn’t want to go with variable, and our monthly payment would’ve been a little more with the higher fixed rate than it would with the PMI, and–as we locked in our rates back in December–we didn’t want to go variable, for good reason.
But we did almost go with an 80/20, so that’s pretty good advice :).