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Started By
Message
Looking to buy a house, need mortgage advice
Posted on 2/7/12 at 10:22 am
Posted on 2/7/12 at 10:22 am
So we have enough to put 20% down
if we put 20% down we were offered a fixed 3.75% over 30 years
but they said if we put less than 20%, we can get a fixed FHA at 3.5% over 30 years, but we would have to pay PMI
I was wondering, would it be smarter to take the 3.75
OR
should i put down 19.5%, get the 3.5% rate, pay the pmi for 5 years (the bank requires you pay it for at least 5 years) then get it removed. that way i still have roughly the same amount of equity in the house but with a lower rate.
what would be the better move?
if we put 20% down we were offered a fixed 3.75% over 30 years
but they said if we put less than 20%, we can get a fixed FHA at 3.5% over 30 years, but we would have to pay PMI
I was wondering, would it be smarter to take the 3.75
OR
should i put down 19.5%, get the 3.5% rate, pay the pmi for 5 years (the bank requires you pay it for at least 5 years) then get it removed. that way i still have roughly the same amount of equity in the house but with a lower rate.
what would be the better move?
7
Posted on 2/7/12 at 10:48 am to Ash Williams
Do they not allow you to remove the PMI, after you reach 20% equity??
Posted on 2/7/12 at 10:56 am to Ash Williams
How much is the home? I bet PMI runs $100+ a month...
Posted on 2/7/12 at 10:56 am to Ash Williams
Depends on how big the PMI is in relation to the size of the mortgage.
Posted on 2/7/12 at 10:56 am to Kingwood Tiger
THere are many varibles to consider. On FHA your goning to pay I think 1% up front on the MIP (FHA PMI). DO the math and see what the cost are to you over the long haul.
Posted on 2/7/12 at 11:04 am to Kingwood Tiger
quote:
Do they not allow you to remove the PMI, after you reach 20% equity??
they do, unless you reach 20% before paying 5 years of PMI (because people like me who think they're sneaky and wanted to pay 19.99% down payment)
Posted on 2/7/12 at 11:10 am to Ash Williams
Put the 20% down and take 3.75%. with FHA you will have a 1% up front fee and high monthly pmi for 7 years.
Posted on 2/7/12 at 11:14 am to Ash Williams
Do what they don't want you to do. 
Posted on 2/7/12 at 11:16 am to wickowick
quote:
How much is the home? I bet PMI runs $100+ a month...
220K
yea i dont have the numbers in front of me but PMI was roughly $120 per month i believe
i did the numbers, with 5 years of pmi 120 per month (7200 added to the total amount paid over 30 yers), the FHA over 30 years will be about $2000 more if i paid 12 payments a year over 30 years.
ETA: and that doesnt include the 1% upfront fee
This post was edited on 2/7/12 at 11:18 am
Posted on 2/7/12 at 11:18 am to Chad504boy
quote:
Do what they don't want you to do.
now thats sound advice
Posted on 2/7/12 at 2:21 pm to Ash Williams
quote:
yea i dont have the numbers in front of me but PMI was roughly $120 per month i believe
I just bought a house, $212,000 in The Woodlands, TX
PMI is around $180 a month
Posted on 2/7/12 at 2:25 pm to MNCscripper
I don't even need to run no math problems to know it sounds like PMI is a fricking bank money maker and they want some of that shite and that .25 interest deduction I don't think comes close to wiping the wash away or else why they doing it?
Posted on 2/7/12 at 8:02 pm to Ash Williams
quote:
yea i dont have the numbers in front of me but PMI was roughly $120 per month i believe
207 Per month for FHA MI: Minimum of 5 Yrs before it is removed.
Posted on 2/7/12 at 8:43 pm to Ash Williams
We are in a similar situation but we are a little short of the 20% down. It still makes since numbers wise to do the conventional with the higher rate. There is PMI on a conventional with less than 20% down, but the rate is way lower than an FHA loan. I have all the numbers in a spreadsheet and can estimate the monthly payment within a few dollars.
Posted on 2/9/12 at 3:05 pm to LSUSUPERSTAR
If you are very liquid go Conv. route. If the 20% down will take all you have, go FHA and pre-pay as much as you can, but keep funds in your pocket for a "rainy day".
Posted on 2/9/12 at 3:10 pm to Ash Williams
Look into a rural house loan. Low interest and NO PMI.
Posted on 2/12/12 at 11:13 am to crazytigerfan69
quote:
Look into a rural house loan. Low interest and NO PMI.
They do have PMI on the now, but it is much cheaper than FHA or even conventional loans.
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