Re:Young Homebuyers Are Vanishing from the U.S.
by awinder on Friday November 08, 2019 @11:42AM
(#21483927)
Maxing your 401k at 24, wowza young people are smart these days. Whatever you do, do not beat yourself up about finances (too much, I mean maybe you're reckless elsewhere but I doubt it) because you've maximized meaningful time in the market like 2-3 years into your career. From a dollars perspective you'll be able to make all kinds of "mistakes" later on from that 1 decision.
PMI causes this kind of visceral reaction in people, but IMHO it's a little overblown. Using your example, if you put down 5% on a 600K loan and you have outstanding credit, it would cost you like 21K all-in, and at 3.75/30 year you'd be at 1.2M for the 600K loan. So think about your timetable for how long it'd go for 30K for 5% to 120K for 20%, compared to the 21K all-in costs of PMI. In fact you can pre-pay it for additional savings or not carrying the additional monthly payment, but anyways, just something to consider.
PMI causes this kind of visceral reaction in people, but IMHO it's a little overblown. Using your example, if you put down 5% on a 600K loan and you have outstanding credit, it would cost you like 21K all-in, and at 3.75/30 year you'd be at 1.2M for the 600K loan. So think about your timetable for how long it'd go for 30K for 5% to 120K for 20%, compared to the 21K all-in costs of PMI. In fact you can pre-pay it for additional savings or not carrying the additional monthly payment, but anyways, just something to consider.