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Chasin The Tiger
LSU Fan
Lake Travis, TX
Member since Sep 2012
350 posts
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re: Is it always best to put 20% down on a house to avoid PMI?
You do realize that my mortgage payment with principal, interest, pmi, insurance, and taxes was the same amount as if I had rented the same house? And I probably spent less than $1000 in maintenance in the 2 years I owned it.


21JumpStreet
Texas Tech Fan
Member since Jul 2012
11754 posts

re: Is it always best to put 20% down on a house to avoid PMI?
If you can afford it, yes.


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thelawnwranglers
LSU Fan
Member since Sep 2007
29711 posts
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re: Is it always best to put 20% down on a house to avoid PMI?
quote:

15k wasn’t it? I done fricked up baw


Yep


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Joshjrn
LSU Fan
Baton Rouge
Member since Dec 2008
16180 posts
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re: Is it always best to put 20% down on a house to avoid PMI?
quote:

You do realize that my mortgage payment with principal, interest, pmi, insurance, and taxes was the same amount as if I had rented the same house? And I probably spent less than $1000 in maintenance in the 2 years I owned it.


And what percentage of that money would you say went to your principal during those two years?


jimbeam
USA Fan
University of LSU
Member since Oct 2011
66639 posts

re: Is it always best to put 20% down on a house to avoid PMI?
Well 0 was going to principal when he was renting


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Chasin The Tiger
LSU Fan
Lake Travis, TX
Member since Sep 2012
350 posts
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re: Is it always best to put 20% down on a house to avoid PMI?
Not to mention the tax deductions and the home appreciated 80k in 2 years.


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audioaxes1
Member since Jul 2019
165 posts

re: Is it always best to put 20% down on a house to avoid PMI?
quote:

As a person in the mortgage industry don’t put 20% down. Instead of monthly PMI, see if your mortgage person can run a one time single premium MI. It’s a one time charge and you never pay monthly MI.


if you sell before you break even then that would not be the best route


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PropofoLSU
LSU Fan
Irwin, Idaho
Member since Aug 2013
432 posts
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re: Is it always best to put 20% down on a house to avoid PMI?
If you rented you wouldn’t have paid taxes, home owners insurance, or maintained a home in addition to interest....

You’d have saved about 50k on a 300k home
This post was edited on 11/20 at 5:55 am


Chasin The Tiger
LSU Fan
Lake Travis, TX
Member since Sep 2012
350 posts
 Online 

re: Is it always best to put 20% down on a house to avoid PMI?
You still would've paid all of that in your rent payment. It would've just been going towards your landlords mortgage.


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21
Decisions
LSU Fan
Member since Mar 2015
1211 posts

re: Is it always best to put 20% down on a house to avoid PMI?
I was not expecting this to be such a heated debate!

It’s pretty simple math, as another poster said, to analyze what your total cost is going to be of putting the extra money down vs. not.

What’s not simple is determining your risk tolerance and how much you could be making off of that money in other investments.

I used to be in the “pay debt off quickly if able, put the 20% down” group. Now I’ve shifted to “let the leverage and debt work for me, just don’t get overextended”. Where is “overextended”? That’s a great question with a host of different answers.

Congrats on being in this situation, regardless. It sounds like you’ve been working hard and have your head in a good place if you’re trying to learn these things so early!


Auburn80
Auburn Fan
Member since Nov 2017
2557 posts

re: Is it always best to put 20% down on a house to avoid PMI?
Congrats on your house. This is one of those situations where it’s risk in the market vs getting rid of PMI. For me, I would get rid of the PMI and reduce my debt. Others will invest. Neither is wrong, it just depends on your mindset.

If you’re able to save 10% of your earnings either way, you are going to be fine long term no matter what you decide.


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Ed Osteen
New Orleans Saints Fan
504
Member since Oct 2007
48533 posts
 Online 

re: Is it always best to put 20% down on a house to avoid PMI?
quote:

I'm 22 years old


quote:

Member since Oct 2005


Que?


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crazyLSUfan
LSU Fan
LA (Lower Alabama)
Member since Aug 2006
6686 posts

re: Is it always best to put 20% down on a house to avoid PMI?
You were posting on this site as a 7 year old?!?

ETA: Dammit. See I’m late with this question
This post was edited on 11/21 at 1:42 am


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Jag_Warrior
Virginia Fan
Virginia
Member since May 2015
1913 posts

re: Is it always best to put 20% down on a house to avoid PMI?
quote:

just don’t get overextended”. Where is “overextended”? That’s a great question with a host of different answers.


Excellent observation.

Given his age, I’ll guess that if/when wifey and kiddo come along, this won’t be the “forever” house. So the PMI (which is just throwing money away) may not be a long term detriment. And even if he does hang onto the house longer term, with a reasonable downpayment + appreciation, he may be able to get out if it soon enough anyway.

But as you accurately pointed out, it’s a balancing act. And I would view the PMI as the cost of having access to the cash that he’s not putting down.


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