You appear to be interpreting correctly. You would qualify under paragraph 3. Be sure you are reading the TurboTax numbers correctly as well. The PMI would be included as interest deduction while the real estate taxes would be under property taxes.
After you have entered all the form 1098 info and you get back to summary of "Deductions & Credits" page you should see the total for "Mortgage, refinancing..." section total the interest and applicable PMI. While the "property tax" section has the real estate taxes.
if you wish to check the numbers, see page 10 of this IRS publication to aid with the calculation as well as additionally information on the deduction.
Remember the Private Mortgage Insurance premium deduction begins to phase out for married filing joint incomes over $100,000 until completely phased out at $109,000.
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