Screamindemon3
Well-known member
What's the top 3 things to consider when getting a mortgage on my first home? What's negotiable? Whats the best tactics to use? What should I watch out for?
What's the top 3 things to consider when getting a mortgage on my first home? What's negotiable? Whats the best tactics to use? What should I watch out for?
PMI is where I am struggling with what to do. We're planning to go 10% down. Do I pay the lump sum and buyout the PMI day 1? Or just sit there and eat it for x years until we hit 20% equity? I did the calculations and the break even point on paying off upfront vs. monthly PMI payments is like 3 years 4 months. That seems like a no brainer to me? What am I missing? I guess the downside is if we moved out next year, that upfront payment is gone. I think we're planning to get 8-12 years out of this house before needing to upgrade (assuming birth control works as planned)
You could go 80-10-10 and avoid PMI. 10 down, 80 first mortgage and 10 HELOC for the remainder.
Is that better than paying upfront? What are the pros/cons of each or scenarios where one makes more sense than the other?
I’m not sure what you mean by paying upfront. I guess the comparison to make would be the difference between the interest expense to finance the home equity line on your 10% vs whatever the PMI costs.
And is PMI tax deductible? I think the interest expense would be, although given tax law changes that might not make a difference to your taxes.
Nah we’ll have a kid during that time. Just don’t need a second
You can pay a flat fee upfront at closing the eliminate PMI throughout the life of the loan. In my case its like 3.2k upfront one time fee (where monthly PMI would be 82.00 if I didn't pay upfront)
Nah we’ll have a kid during that time. Just don’t need a second
Ok so will the interest expense on a home equity line equal to your 10% down payment exceed $3200 before you can pay off that line to get to 20% equity.
My best advice is to buy in a school district you can live with. Also, if you buy a 2,500 sf house in a neighborhood that costs $275/sf today, it's a big jump to get into a 3,500 sf house 10 years from now in a neighborhood that costs $325/sf today, allowing for similar appreciation during the interim.
yeah, man, if you want to buy the presently valued $1.1 million home then your $680,000 starter home won't get you as far as you think