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re: Extra $10,000: finish paying off truck or put towards down payment on a house?(Updated)
Posted on 7/7/20 at 8:41 am to Undertow
Posted on 7/7/20 at 8:41 am to Undertow
I look at PMI like interest on a loan.
How far off are you from PMI and are you willing to pay that "interest" on the difference?
IE. you elect to only pay 10% down resulting in a PMI of $100/month. How much liquidity did you shelter and is it worth it to you?
if you kept 15k instead of paying the full 20%, you effectively took out a 15k loan at 8% interest (assuming 100/m PMI) for x number of years (however long it will take you to get your equity position to 20%). You have to decide if that's worth it to you.
I'm sure your numbers are different but that's how I look at PMI.
How far off are you from PMI and are you willing to pay that "interest" on the difference?
IE. you elect to only pay 10% down resulting in a PMI of $100/month. How much liquidity did you shelter and is it worth it to you?
if you kept 15k instead of paying the full 20%, you effectively took out a 15k loan at 8% interest (assuming 100/m PMI) for x number of years (however long it will take you to get your equity position to 20%). You have to decide if that's worth it to you.
I'm sure your numbers are different but that's how I look at PMI.
This post was edited on 7/7/20 at 8:43 am
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