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Based on checking a 500k house with a 50k down payment, this tells me PMI will be about 2k/year for the first 3 years. Is it really that cheap? Is there any rea
by silicon2401 5y ago
Based on checking a 500k house with a 50k down payment, this tells me PMI will be about 2k/year for the first 3 years. Is it really that cheap? Is there any reason to not go for a <20% down payment if it allows me to accelerate my house planning by several years, if it only ends up costing around 6k extra?
- vel0city 5y agoYeah, my home was ~$320k, ~10% down, my PMI is $140/mo. The mortgage is written so if the house appraises higher that speeds up the point where PMI is taken off. Personally I think some people overly freak out about PMI. When you're talking the size of numbers involved in the mortgage and escrow accounts, $140/mo for a few years really isn't that crazy especially if it means you can get into the market sooner in a home you really want. I probably wouldn't have bought the house I'm in now looking at comps in my neighborhood. In a bit over a year comparable houses in my neighborhood are $60k+ more than what we bought at, and Zillow's estimate for my house (take it with a massive grain of salt) puts it a hair over $400k. If we would have waited a year for 15-20% we wouldn't be where we are now.
- silicon2401 5y agoGreat point. In a way, the PMI becomes like an added aspect to the investment side of buying a house, in that you can either pay more money up front (the PMI, I mean) but get a better return on investment by having gotten in the market earlier. Whereas if you wait to save up for a down payment, the rising house prices may outpace your savings.