First time home owner - buying a condo

I am actually about to put a condo on the market.

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I love how people bitch about pmi, but it allows you to get a loan and build equity into a property instead of paying rent. PMI is definitely not "pointless"

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Total agree, its 1000x better than paying rent.

It really depends on the market. Avoiding PMI is probably the right decision and not overly difficult in most of the south. Good luck avoiding PMI as a first time buyer in a market where the average home price is >650K and condos are going for 450-500K.

You want your total home expenses under $1200/ month with only $10k to put down? 15 year mortgage is definitely out then and even with a 30 year you are looking at a sub $150k place.

If you are talking about living in it long term like 10 years than a 30 year is fine, but with you talking about 3-5 years a 30 year with less than 20% down your interest and PMI is going to be so high you are not going to be accruing much if any equity at all.

riddle me this, how much equity do you put in your home that first year on $250k mortgage at say 3.75%?

You build like $4k of equity in the first year wow big deal. If the guy just finished his MBA and started making $90k thats one thing, hes 30 but if he's been working for 9 years and all he has is $10k its a whole different ballgame. The equity built in 1 year vs paying the pmi is negligible at best

You put in aout $370-380/mo equity in year 1 and PMI on a 250,000 home with a 240,000 loan is $235/mo.....I just looked. So $100 of equity give or take.

To someone making $90k a year, $100/mo of equity isnt that big a deal when your bigger issue if you made $90k for years is the fact you cant seem to save anything up thats all I said.

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with interest rates so low, is it wise to go w/ fixed 30 yr over fixed 20 yr?

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Especially if you itemize and can deduct mortgage interest, I believe in most cases yes. You don't want to pay extra to bring your rate below the rate of inflation, that's just giving away money.

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hes 30 but if he's been working for 9 years and all he has is $10k its a whole different ballgame. The equity built in 1 year vs paying the pmi is negligible at best

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Its doubtful that he made 85k out of school and stayed there. He most likely had student loans and started at 40-50k and just now is hitting 80k+. 10k in savings is not much, but it also could be that he has 10k for a downpayment and has 10-20k more in cash.

I would never recommend someone buying a house at retail cost to then rent out even 3-5 years down the road. If you find a great deal you'll live in for 3-5 years that's one thing, but renting something out for a little positive cash flow is generally not a good use of your money.

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Jesus man $90k income and only $10k saved?

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I just got a 20k raise 6 months ago after getting my MBA and finished paying off $63k in student loans last month. I've got 70k in 401k/IRA's and 30k in taxable E*Trade acct (50/50 vtsmx / vwinx).

Emergency fund of 15k (5k vwinx & 10k cash) established, 10k cash saved for house downpayment. With the cost of cash @ only 3.5-4% my strategy has been max out tax deductible investment vehicles with the assumption that a $ invested today is theoretically worth more than $ invested 5 yrs from now.

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You want your total home expenses under $1200/ month with only $10k to put down? 15 year mortgage is definitely out then and even with a 30 year you are looking at a sub $150k place.

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Correct. I travel a minimum of 3 days a week. My plan was buy an inexpensive (140-160k) 3/br 2/ba condo within 10 miles of campus. I basically need a place to call home 4 days a week & store all my shite while I'm out of town. In a few year's I'll buy a house and ideally rent the condo out. The other option is rent an apt/condo for 11-1200/mo or a house for 13-1400 mo.

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Its doubtful that he made 85k out of school and stayed there. He most likely had student loans and started at 40-50k and just now is hitting 80k+. 10k in savings is not much, but it also could be that he has 10k for a downpayment and has 10-20k more in cash

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spot on sir . Made 48 out of school 6 yrs ago.





Again - not claiming to be a finance wizard, that's why I'm here. Currently saving 1200/mo in cash and $1500/mo in ret./inv. accounts. I can adjust those or sell some equities if avoiding the whopping $75 PMI is critical. Thus far I'm pleased with my financial decisions


ETA - Not OT baller

One of the fairly frequent posters on here said that he got a mortgage with less than 20% down (10%, maybe) and didn't have PMI. Sorry, I don't remember his name. Maybe he'll see this and chime in though. There are various mortgage programs, some state based, others through credit unions. Don't automatically assume that you'll have PMI if you don't have 20% down.

If you can afford a 20 or 15, the rate spread (vs. a 30) was quite attractive the last time that I looked. But if you go with a 30 and you're going to keep the property, it's not as if you'll be making a mistake taking money at 3.5% +/-.

As far as the condo, read the condo docs carefully, to make sure that your future rental plans are allowable.

Best of luck