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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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I know its been discussed before (PMI related)
but what would you do?
1. Pay PMI
2. Roll PMI into the mortgage
3. Get a HELOC
since FH and I are looking at houses that need work, we want to have the most $$ in the bank, so we are probably not putting 20% down.
Which would you pick and why??
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Posted 8/25/06 1:11 PM  |
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SweetestOfPeas
J'taime Paris!
Member since 3/06 32345 total posts
Name:
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Re: I know its been discussed before (PMI related)
how much would the PMI be per month?
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| Posted 8/25/06 1:17 PM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: I know its been discussed before (PMI related)
Posted by SweetestOfPeas
how much would the PMI be per month?
IDK - is it usually a % something?
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| Posted 8/25/06 1:21 PM |
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SweetestOfPeas
J'taime Paris!
Member since 3/06 32345 total posts
Name:
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Re: I know its been discussed before (PMI related)
Posted by Meaghan729
Posted by SweetestOfPeas
how much would the PMI be per month?
IDK - is it usually a % something?
it depends on the cost. you really have to sit down and figure out how much you would be paying in higher interest for the 2nd loan vs. the PMI.
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| Posted 8/25/06 1:22 PM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: I know its been discussed before (PMI related)
Posted by SweetestOfPeas
Posted by Meaghan729
Posted by SweetestOfPeas
how much would the PMI be per month?
IDK - is it usually a % something?
it depends on the cost. you really have to sit down and figure out how much you would be paying in higher interest for the 2nd loan vs. the PMI.
I can never seem to find how much PMI actually costs...
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| Posted 8/25/06 1:24 PM |
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SweetestOfPeas
J'taime Paris!
Member since 3/06 32345 total posts
Name:
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Re: I know its been discussed before (PMI related)
Posted by Meaghan729
Posted by SweetestOfPeas
Posted by Meaghan729
Posted by SweetestOfPeas
how much would the PMI be per month?
IDK - is it usually a % something?
it depends on the cost. you really have to sit down and figure out how much you would be paying in higher interest for the 2nd loan vs. the PMI.
I can never seem to find how much PMI actually costs...
don't quote me or anything, but I heard that it's $100 a month for every $100K of your mortgage 
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| Posted 8/25/06 1:25 PM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: I know its been discussed before (PMI related)
Posted by SweetestOfPeas
Posted by Meaghan729
Posted by SweetestOfPeas
Posted by Meaghan729
Posted by SweetestOfPeas
how much would the PMI be per month?
IDK - is it usually a % something?
it depends on the cost. you really have to sit down and figure out how much you would be paying in higher interest for the 2nd loan vs. the PMI.
I can never seem to find how much PMI actually costs...
don't quote me or anything, but I heard that it's $100 a month for every $100K of your mortgage
thanks! i'll do some number crunching!
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| Posted 8/25/06 2:37 PM |
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riniko
LIF Toddler
Member since 3/06 486 total posts
Name:
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Re: I know its been discussed before (PMI related)
I would pay for upfront PMI which you can roll into your mortgage costs, hence tax-deductible.
While Heloc or piggy back loans were preferred earlier, the best option in current market is this.
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| Posted 8/25/06 3:07 PM |
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LisaI
Momma's Little Beans
Member since 1/06 3923 total posts
Name:
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Re: I know its been discussed before (PMI related)
we did option #2 with our currect house and option #1 with our new house.
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| Posted 8/25/06 3:29 PM |
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LuckySV
LIF Adult
Member since 10/05 4675 total posts
Name:
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Re: I know its been discussed before (PMI related)
We didn't do PMI but our 2nd mortgage is a fixed rate. Maybe you could look into that.
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| Posted 8/25/06 3:33 PM |
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charon54
My two boys!
Member since 5/05 7279 total posts
Name:
Rebecca
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Re: I know its been discussed before (PMI related)
I wouldn't pay PMI, IMO it's a waste. Why pay the bank when you can be using that money to build equity.
Wamu has a great home equity product which allows you to take out a home equity and then for a small fee (I think $250) you can lock the rate on the whole balance. That's what I have. They are a vendor here if you need more info, post on the Vendors Helping Businesses.
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| Posted 8/25/06 4:55 PM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: I know its been discussed before (PMI related)
Posted by charon54
I wouldn't pay PMI, IMO it's a waste. Why pay the bank when you can be using that money to build equity.
Wamu has a great home equity product which allows you to take out a home equity and then for a small fee (I think $250) you can lock the rate on the whole balance. That's what I have. They are a vendor here if you need more info, post on the Vendors Helping Businesses.
youre building equity either way-
if you have PMI your first mortgage will be for , lets say, 95% LTV - or 80/15.
i guess it depends if PMI is less or more than the interest on the second mortgage...
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| Posted 8/25/06 4:58 PM |
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LisaI
Momma's Little Beans
Member since 1/06 3923 total posts
Name:
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Re: I know its been discussed before (PMI related)
Posted by charon54
I wouldn't pay PMI, IMO it's a waste. Why pay the bank when you can be using that money to build equity.
Wamu has a great home equity product which allows you to take out a home equity and then for a small fee (I think $250) you can lock the rate on the whole balance. That's what I have. They are a vendor here if you need more info, post on the Vendors Helping Businesses.
I agree, i have always been told by our mortgage company and other finacial advisors that PMI is a waste of money and to try and pay it off or avoid it in the first place if you can, not everyone can. DH complains about PMI everytime we get our current mortgage. Thankfully with the new house we are avoiding it as I mentioned.
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| Posted 8/25/06 5:09 PM |
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Freddie
LIF Adult
Member since 3/06 1162 total posts
Name:
Freddie
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Re: I know its been discussed before (PMI related)
this is from Suze Orman:
Home in on the Right Low Down Payment Mortgage
With the average price of a home climbing above $200,000, it's understandable that many home buyers don't have the full 20 percent down payment that lenders want to see. That means more home buyers are getting stuck paying "Private Mortgage Insurance," an added monthly charge that protects the lender if you ultimately can't keep up with your mortgage payments.
Traditionally, lenders would just tack on the monthly PMI as an added cost to your mortgage. More recently, the piggyback loan, where you take out a home equity line of credit to cover the difference between your down payment and the magic 20 percent lenders want to see, has become a popular way to sidestep PMI. But the problem with a piggyback is that as Federal Reserve Chairman Alan Greenspan raises the fed funds rate, the interest rates on home equity lines of credit are going up, which means your monthly payments are going to increase. That's not good.
My advice is to skip both the traditional PMI and the piggyback and instead ask your lender to roll your PMI into the cost of the mortgage; it can be the least expensive way to land a home when you have less than 20 percent to put down.
The cost of rolling the PMI into the mortgage is typically 1 percent of the mortgage amount, which will boost a $200,000 mortgage to $202,000. On a 30-year fixed rate mortgage charging 6 percent interest, that would raise your monthly cost from $1,199 to $1,211. That's $12 more a month. If you instead paid the PMI as a separate cost you would be looking at about an $86-a-month charge. So we just saved you $74 a month. And unlike straight PMI which is not tax-deductible, when it's rolled into your mortgage, the interest payments are deductible.
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| Posted 8/25/06 5:20 PM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: I know its been discussed before (PMI related)
thanks Ricki! I knew I read about rolling PMI into the mortgage somewhere! Gotta Love Suze
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| Posted 8/25/06 5:26 PM |
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riniko
LIF Toddler
Member since 3/06 486 total posts
Name:
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Re: I know its been discussed before (PMI related)
Posted by riniko
I would pay for upfront PMI which you can roll into your mortgage costs, hence tax-deductible.
While Heloc or piggy back loans were preferred earlier, the best option in current market is this.
Suze agrees with me. 
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| Posted 8/25/06 6:37 PM |
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CkGm
They get so big, so fast :(
Member since 5/05 13848 total posts
Name:
Christine
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Re: I know its been discussed before (PMI related)
Posted by riniko
I would pay for upfront PMI which you can roll into your mortgage costs, hence tax-deductible.
While Heloc or piggy back loans were preferred earlier, the best option in current market is this.
I was going to say the same thing. You can always get a refund on these costs if you meet the 20% in equity.
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| Posted 8/26/06 2:08 PM |
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sunnyplus3
:)
Member since 11/05 8749 total posts
Name:
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Re: I know its been discussed before (PMI related)
we went for PMI & I'm glad we did. In less than two years we had it removed & worked out costing us much less than a second ARM would have. Even though the interest would have been tax deductible I didn't want to worry of the adjusting rate. We'd still be paying it as the rates go up.
The other concern is that bill that keeps making its way to congress about disqualifying mortgage interest on loans over $315k from the deduction status. Our mortgage is less anyway, but most LIers isn't so you can't always count on that deduction. They say if they do pass that bill they will rework the AMT, so that will help to balance it.
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| Posted 8/27/06 9:51 AM |
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2kids2cats
My babies
Member since 6/05 5229 total posts
Name:
f
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Re: I know its been discussed before (PMI related)
We are paying PMI. It's only $110 more a month and that will be for a few years if that since our house appraised at more than what we paid for it. To me that was a lot better than paying a 2nd mortgage for a longer time, even at a fixed rate.
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| Posted 8/27/06 10:34 AM |
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Samson7256
LIF Infant
Member since 5/06 93 total posts
Name:
John
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Re: I know its been discussed before (PMI related)
Posted by riniko
I would pay for upfront PMI which you can roll into your mortgage costs, hence tax-deductible.
While Heloc or piggy back loans were preferred earlier, the best option in current market is this.
This option that Suze Orman details in her article Rolling PMI into the cost of the mortgage
seems too good to be true...you can eliminate PMI on a 300k mortgage by simply adding 3k to the mortgage...which at 6% only increases the monthly pymt by approx $20...and the additional interest incurred would be tax deductible...seems much more beneificial than a piggyback loan.
Anyway, basically my question is can anyone confirm that lenders are willing to roll the pmi into the mortgage for only 1% of the mortgage amount ?
Has anyone done this themselves ?
Thanks in advance
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| Posted 10/18/06 12:56 PM |
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oneday
<3
Member since 5/05 4319 total posts
Name:
Pam
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Re: I know its been discussed before (PMI related)
Posted by KellyFG
we went for PMI & I'm glad we did. In less than two years we had it removed & worked out costing us much less than a second ARM would have. Even though the interest would have been tax deductible I didn't want to worry of the adjusting rate. We'd still be paying it as the rates go up.
Kelly - How did you get it removed? Do you have to have the bank re-appraise your house? Do they charge you to do that?
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| Posted 10/18/06 4:38 PM |
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bikramaddict
mommy-to-be
Member since 8/06 4376 total posts
Name:
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Re: I know its been discussed before (PMI related)
get a HELOC.
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| Posted 10/18/06 4:45 PM |
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ODonnell
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Member since 9/05 5983 total posts
Name:
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Re: I know its been discussed before (PMI related)
I paid PMI on my first place. It was only $70 a month and I was able to eliminate it after 2 years. That would still be my option if I didn't have 20%. IMO a HELOC is too volatile, while the PMI stays the same.
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| Posted 10/18/06 5:13 PM |
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