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Message
re: PMI: Is it as bad as I think it is?
Posted on 12/7/19 at 8:28 am to GeauxGutsy
Posted on 12/7/19 at 8:28 am to GeauxGutsy
quote:
Building equity is situational with many variables at play
Sure but paying principal or a bigger down payment doesnt "build" equity
1
Posted on 12/7/19 at 8:30 am to EarlyCuyler3
In most areas, this is a terrible market for a new home buyer because prices are way up.
If you already owned a home you could sell high and buy high...so you’re just on the wave.
The real play in homeownership is rising values, and I don’t think there’s much more room for that.
Also, if you don’t have a real solid down payment (40% or so), about 80% of your monthly payment will go to interest, escrow, and PMI (in your case). You won’t see appreciable declines in your principle for 10 years or so.
AND you’ll be on the hook when something breaks.
Here’s my advice:
Rent
Enjoy being young
Call the landlord when your AC breaks
Save as much as you can
Buy a house in the next downturn
Enjoy watching your equity grow
If you already owned a home you could sell high and buy high...so you’re just on the wave.
The real play in homeownership is rising values, and I don’t think there’s much more room for that.
Also, if you don’t have a real solid down payment (40% or so), about 80% of your monthly payment will go to interest, escrow, and PMI (in your case). You won’t see appreciable declines in your principle for 10 years or so.
AND you’ll be on the hook when something breaks.
Here’s my advice:
Rent
Enjoy being young
Call the landlord when your AC breaks
Save as much as you can
Buy a house in the next downturn
Enjoy watching your equity grow
This post was edited on 12/7/19 at 8:32 am
Posted on 12/7/19 at 8:31 am to GeauxGutsy
Sit down and do the math....
depending on what you are paying in rent now... it may be better to bite the bullet and buy now even with paying PMI...interest rates at or below 4%, contemplating a refi on my rental property (they offered 3.1%, unsolicited so I might be able to beat it).
depending on what you are paying in rent now... it may be better to bite the bullet and buy now even with paying PMI...interest rates at or below 4%, contemplating a refi on my rental property (they offered 3.1%, unsolicited so I might be able to beat it).
Posted on 12/7/19 at 8:32 am to EarlyCuyler3
I had a va loan, so I never had pmi. But I would save as much as possible to reduce the pmi. I would much rather buy a home than rent.
Posted on 12/7/19 at 8:33 am to Eli Goldfinger
quote:
Also, if you don’t have a real solid down payment (40% or so), about 80% of your monthly payment will go to interest
Thats the same for any 30yr fix loan with any amount down for the first 15yrs
Have you ever seen an amortization calculator
Posted on 12/7/19 at 9:24 am to EarlyCuyler3
Don’t buy shite you can’t afford. If you have to pay PMI then you can’t afford the house. PMI is for dead beats. You probably carry credit card debt too.
Posted on 12/7/19 at 9:36 am to BigPerm30
Lmao
Posted on 12/7/19 at 9:38 am to BigPerm30
quote:
Don’t buy shite you can’t afford. If you have to pay PMI then you can’t afford the house.
Low iq on display
Posted on 12/7/19 at 9:41 am to SDVTiger
Sorry you have to make PMI payments and credit card interest payments. Hang in there. One day you’ll be financially responsible.
Posted on 12/7/19 at 9:44 am to BigPerm30
Interest is simply the price you pay for enjoying something now.
Not an item to act all superior about. You have a poor understanding of real life.
Hope you are well.
Not an item to act all superior about. You have a poor understanding of real life.
Hope you are well.
This post was edited on 12/7/19 at 9:44 am
Posted on 12/7/19 at 9:45 am to BigPerm30
Like I said low iq on display for all to see
Posted on 12/7/19 at 9:55 am to SDVTiger
quote:
Sure but paying principal or a bigger down payment doesnt "build" equity
I disagree. Down payment to relieve PMI and paying over monthly mortgage payment both help build equity faster. Investing the down payment could be a better option-just depends.
Credit worthiness and market value IMO are at the top of the list.
Posted on 12/7/19 at 9:57 am to EarlyCuyler3
I begged bartered and scraped my way into putting enough down on my house to avoid the pmi. If you can pull it off I recommend doing it.
Posted on 12/7/19 at 9:59 am to GeauxGutsy
quote:
I disagree. Down payment to relieve PMI and paying over monthly mortgage payment both help build equity faster
Paying principal isnt building equity
Posted on 12/7/19 at 10:28 am to EarlyCuyler3
quote:
Another thing is I don't know if I'll be there 5 years or not, so I may not build any equity at all. But the mortage would be cheaper where I'm looking than rent is, so there are some savings there as well.
Right, because the rent has risk of repairs, and various expenses that aren’t part of your mortgage. it’s not just the owner pocketing the gap.
Is the mortgage plus basic upkeep, closing costs, realtor fees, PMI, saving you enough money to justify being locked in?
The more you post the more I’d say toss the catch phrases about rent out the window and make sure you really run the numbers side by side. If you are only coming out slightly ahead buying - the flexibility and risk protection of renting is valuable
Posted on 12/7/19 at 10:34 am to EarlyCuyler3
quote:
So is it worth biting the bullet on it and start building equity and getting out of a rental?
if you don't have the $ for a down payment but want a home, I'd do it, what you need to do is pay additional principal at first and keep up with local property values, the minute your home appraises for an amount that gives you > 20% equity you won't have to pay it anymore, and blee dis, your mortgage company will not tell you when you've reached that point
Posted on 12/7/19 at 10:47 am to 777Tiger
Buying a house now
Rented in a high demand, high property tax area while my kids were in HS
Schools were exemplary, did the math and amazingly we were break even in rent vs Mortgage/prop taxes/etc for houses in the area
They are now in college so we are moving to new construction in a rapidly developing area nearby
Buying a model home with a quick close before 12/31
Been interesting to see the house buying process changes between 2010 and now
Rented in a high demand, high property tax area while my kids were in HS
Schools were exemplary, did the math and amazingly we were break even in rent vs Mortgage/prop taxes/etc for houses in the area
They are now in college so we are moving to new construction in a rapidly developing area nearby
Buying a model home with a quick close before 12/31
Been interesting to see the house buying process changes between 2010 and now
Posted on 12/7/19 at 10:50 am to supatigah
quote:
we were break even in rent vs Mortgage/prop taxes/etc for houses in the area
quote:
Been interesting to see the house buying process changes between 2010 and now
yeah, I like owning but the tax advantages of owning aren't what they used to be, sounds like you made a smart decision for your kids education and even though you were willing to forgo tax advantages for that it seems like the impact was nil
Posted on 12/7/19 at 10:50 am to EarlyCuyler3
take the best loan offer you can get even if it’s FHA with PMI. Save as much money as you can while paying that note for a couple years while keeping your eye on interest rates. Get your credit situation as perfect as it can be
then refinance from a position of strength to a conventional mortgage without PMI. you may need to pay for a reappraisal, the hope would be that the increase in your home’s value would add to your equity position
then refinance from a position of strength to a conventional mortgage without PMI. you may need to pay for a reappraisal, the hope would be that the increase in your home’s value would add to your equity position
Posted on 12/7/19 at 10:57 am to 777Tiger
When we moved to Cinco Ranch Katy in 2013 the market was so high that houses were going for cash before they were even listed
The HS in the area is a top 100 school, prop taxes here are 3.4
We rented a big house 5/4 but older for the neighborhood (2004)
Landlord replaced the dishwasher, the microwave, one AC, and the fence while we were here
We didn’t get ahead by renting, but we broke even, we definitely didn’t lose ground and I enjoyed the fixed expense in my budget
The HS in the area is a top 100 school, prop taxes here are 3.4
We rented a big house 5/4 but older for the neighborhood (2004)
Landlord replaced the dishwasher, the microwave, one AC, and the fence while we were here
We didn’t get ahead by renting, but we broke even, we definitely didn’t lose ground and I enjoyed the fixed expense in my budget
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