Mortgage thoughts

[CuzzinOlaf]

Gotcha, thanks for explaining, it makes perfect sense.

 

[Mike K]

No prob. Also I just realized you are he. So re-read my post and change the he's out for you's. :-D

 

[CuzzinOlaf]

LMAO, If I can get preferential treatment or a better rate, I can identify as a young Latino woman or whatever works.

 

[cap42]

So since we have so many mortgage experts up in here. How does everyone put the minimum down say 5% and not pay PMI? Are they doing 80/15 loans?

Also any recommendations on lenders?

I'm looking to sell my current house and buy another next spring, I've got 20% saved for a 370,000 house. I'd like to not blow it all on the down payment and stay out of PMI. I also had a less than desirable experience with the last mortgage broker so any recommendations would be

Sorry if I am hijacking your thread Olaf

 

[EmersonHart13]

No, I mean $3x.xx but I just re-read my post and did a shit job of making my point. What I was saying was that the difference between the 3.75% 30 year loan paid off on a 20 year schedule and the 3.49% 20 year loan paid on the same schedule is about $30 difference a month but paying the higher interest 30 year loan on the 20 year schedule, though slightly more money each month, would give him a buffer in case something popped up in the future that affected his ability to make the higher payment. So lets say two years from now he loses his job and exhausts his savings... He can then revert to the lower payment of the 30 year loan without needing to refinance, something he likely wouldn't be able to do anyhow if he found himself in a situation where he was unable to pay.

A little birdie told me you rent....

 

[EmersonHart13]

So since we have so many mortgage experts up in here. How does everyone put the minimum down say 5% and not pay PMI? Are they doing 80/15 loans?

Also any recommendations on lenders?

I'm looking to sell my current house and buy another next spring, I've got 20% saved for a 370,000 house. I'd like to not blow it all on the down payment and stay out of PMI. I also had a less than desirable experience with the last mortgage broker so any recommendations would be

Sorry if I am hijacking your thread Olaf

I paid PMI until I paid enough in then got it dropped because I was below 80 LTV.

Pre paid PMI is supposedly a better deal than monthly PMI.

I believe with FHA you have to pay PMI for x number of years no matter if you pay ahead and get below 80LTV which is a shitty deal.

 

[cap42]

I paid PMI until I paid enough in then got it dropped because I was below 80 LTV.

Pre paid PMI is supposedly a better deal than monthly PMI.

I believe with FHA you have to pay PMI for x number of years no matter if you pay ahead and get below 80LTV which is a shitty deal.

My current loan is FHA, I have to pay it for 5 years minimum and until I hit 79% LTV.

I'm told that all new FHA loans the PMI never drops off until you refinance out of FHA regardless of the LTV %. (not sure if that's true or not)

 

[EmersonHart13]

I did just that because of the 5 year rule. I was FHA and found out about that and decided to bail into a conventional 15 year paid a bit more PMI and then hit 80 and it dropped. I got a lower rate and a shorter mortgage so there was more than just getting away from PMI.

FHA isn't a good gig to pay ahead on because of that.

 

[Turk]

You have to look at a lot of factors though.

Anyone looking at a mortgage should be looking at an amortization table to see how much interest is being paid over the life of a 15, 20, and 30 year loan at the differing rates. You can easy plug in the numbers and different mortgage rates to see what each scenario nets out.

Also, it depends on what you're investing in. If you invest in SPY, VOO, VIO or any S&P indexed funds the return annualized is roughly 10%. If you are investing in individual stocks, it varies.

Lastly, you should also look at historical real estate values in your city and neighborhood. The rate of returns pre-crash in 2008 were pretty significant and the market recently has started to come back around.

The loan has no impact on the value of the home. If he does a 30 or 15 year it will not Impact the appreciation or depreciation of the property so your last point has zero impact.

 

[sickmint79]

i'd keep life simple and safe with boring SPY investment and DRIP

homes do not generally appreciate, they generally track the cost of inflation. you are lucky to beat it, and if you do it probably means there was investment/growth in your area that has made it higher demand.

 

[Mike K]

A little birdie told me you rent....

Yeah but I'm still a know-it-all.