Several lenders will do loans that do not require PMI, typically the rate is .5% higher which should be less than the different rates you would have with an 80/15/5..I have a few lenders you are welcome to call for more info. She will put it on a GFE so you see what the difference will actually be. Good Luck!
We did creative financing to avoid PMI. PMI protects the lender, not the buyer... Don't get locked in to just one mortgage provider...Let them EARN your business.
Mine will be the unpopular answer ... If you have to go with creative financing to avoid PMI... you are buying to much house or need to save longer for a down payment.
I think that's more of a YMMV issue, n'est ce pas? We were well able to afford our place. I just didn't see the need to benefit the PMI company rather than my 401K. I would agree that many people who probably couldn't afford a home with the attendant ownership responsibilities were mortgaged into one by a less than scrupulous lender. No one should have been logically thinking that borrowing more than the value of the porperty was a smart idea, over time and for the masses who apparently got into it. Caveat emptor..
Are you a financial planner? Or are you just mad that your paying PMI? As Hat said, there is absolutely no reason to put all that money down, even if you have it. Better to invest it elsewhere, all your eggs in one basket isn't a good thing. And BTW, we did do a piggy back 1st and 2nd even though I had more than enough down payment, thank you very much. That's a pretty broad brush your painting "everyone" with. 8)
If you are now paying PMI you can deduct it on your tax return. It's new for this year. We pay PMI and took out a 100% loan and it wasn't because we couldn't afford the house. We also paid PMI on the house we owned before this one. People take out different loans for a variety of reasons and they tend to get the one that works the best for them.
I've never paid PMI. Always saved at least 20% to put down for the home purchase and did not buy more house than I could afford http://www.daveramsey.com/etc/askdave/?intContentId=6276 PS I noticed a sign on Lighthouse Baptist (near Reedy Creek Rd. & hwy 210 in Four Oaks) stating they will begin Financial Peace University on Feb. 21st. http://www.daveramsey.com/fpu/home/
Your best bet is to have a lender put it on paper for you both ways so that you can make your own informed decision.
Just because Dave Ramsey has lots of good financial advice to offer doesn't mean that his advice is the best advice. You have to do what is financially right for you. Yes, there are lenders who take advantage of less financially savvy people, and if you need help understanding which loan is best for you, ask someone who can help you. NCMom, you obviously did what was right for your family, but everyone's situation is different.
My response was to the orginal message. The poster ASKED for opinions. I gave mine just as others have given their's.
I met with a mortgage broker about the house I'm buying and she told me that lenders are basically doing traditional loans only now. PMI is not as bad as it used to be- -once you pay to 20% of your house, it is dropped from your house payment. It used to pay that you paid the PMI for the length of the loan. Regardless, if you don't have a 20% downpayment, you'll be paying PMI because you can only get a traditional loan now.
Yes, you did give your opinion but your other statements do not fit all people. I,for one, have various reasons for paying PMI. The income earned on my savings by not putting 20% down and tax benefits received counter the PMI paid during the year. Like I said before, you need to look at everything and if you are unsure what's best for you, find someone who can help. Regardless of whether you save 20%, take out 80/20 or 80/15/5 or 100% loan with PMI, you need to know what the payment will be and whether you can afford that payment along with all your other payments. A lender usually looks at income and debt ratios to come up with the amount of house you can afford. What they don't take into consideration is your other bills, housing, grocery, clothing, entertainment, vacation, maintenance, etc., as well as, the debt you might acquire while you are in the house either. The purchaser needs to be realistic and take all those factors into consideration when making one of the biggest purchases they will ever make. Making an educated decision and being honest with yourself about what you can realistically afford will keep you out of bankruptcy and foreclosure.
