re: Car payoff vs larger home downpayment

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option is to pay PMI for a couple years until reaching the 20%, how would you separate the money?

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That is one of those great ideas on paper - but I'm always sketchy on the execution. I had a mortgage with PMI - and they want you to prepay 1 point or whatever - the rest is spread out over the first 3 to 5 years, depending - I think you have to be overly aggressive to track that and ask them to take it off, or whatever. It is just safer, cleaner and more certain to avoid it altogether. I will NEVER pay PMI again. You've got a house. Don't convince yourself you HAVE to pay PMI.

If you've already sold your house and not closed on a new one - buy less house. You're dragging $700 or $800 in car payments AND buying a new house? You were probably premature on that house shopping and I don't mean to be fussing.

However, to anwser your question - if all of this is unavoidable (and I suspect a wife driving a dumb money decision here) - then you commit 100% of the profit from the sale of the old house and throw every penny at the mortgage until you get to 20%, then do whatever it takes to get as much of your PMI back. Pay the cars as scheduled until then.

That's what I would do, anyway (but I wouldn't be incurring PMI, as I indicated.)

I'm already paying PMI on this current house so screwed either way and yes wife is driving this. Happy wife, happy life right?

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Any opinions?

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This is like the car guy asking you how much you want your monthly payments to be. They make you feel better about PMI by keeping it out of your monthly note, but front-loading it into the purchase price, so you finance that over 30 years.

How sweet of them.

So, you're not even 20% flush in your current house and are leaping from 1 PMI mortgage to another? WITH ~$750 or $800 in car loans, the smallest of which matures in 3 years?

You, my brother have a spending problem. And a heavily financed one, at that. Have you explained to the missus how much this costs 20, 30 years down the line?

ETA: I mean - interest rates are very low right now, but if you're paying 3 or 4 percent on $300k - that's $900 to $1000 interest - per month - on your debt service.

Your assessments are horribly wrong. Current house lists ~189. Upgrading to ~230.

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I'm already paying PMI on this current house so screwed either way and yes wife is driving this. Happy wife, happy life right?

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Does she work? If not, she needs a reality check.


Best way to get things under control is setting goals and achieving them. Easy way to do this is instead of having a "savings account" use an app like "You Need A Budget" You can have a "house fund" section so she can see and with your wife you agree that "Once we hit this arbitrary savings in a house fund we will look for houses next day/weekend"

Puts all of it on her to want to save money, not spend as much as she values house etc more than small spending items.


Day I did this with my fiance was the day she decided to stop "shopping" for fun

keep car note... if you pay that off, you'll end up with a car note in 12 months when you buy a new one!

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if you pay that off, you'll end up with a car note in 12 months when you buy a new one!

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This is what I'm worried about, as well. But I take him at his word this isn't an issue - but I've actually been down this path (with much less house, mind you) - all the way down.

I hope you have disability/income interruption insurance and not just life insurance. That's quite a debt load.