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No, you don't need to avoid PMI. If you can, then it is better.
by Finnucane 4y ago
No, you don't need to avoid PMI. If you can, then it is better.
- vel0city 4y ago> If you can, then it is better. That's the whole point of my comment, it isn't always better. I could have avoided any PMI by waiting a bit longer to amass more savings to have a larger down payment. But in doing so I would have avoided <$1,000 in PMI payments but increased the cost of the house by >$100k. It was definitely the better move to just pay the PMI in this case than to try and avoid it. I'd gladly pay $1,000 to make something >$100,000 cheaper in the end.
- treis 4y agoNot necessarily. PMI removes risk for the lender so often that means a better rate. Also the bigger the loan the easier it is for them to make their fixed costs back. A lower down payment usually makes sense if you have the discipline to invest the difference and can tolerate some risk.