Re:Home Price to Income Ratio
by ArchOversight on Monday September 20, 2021 @07:13PM
(#28600227)
PMI for me is $71 a month. Which meant I could save money and use it towards home improvement to make my house better for me (and also increase its value).
Putting down 20% doesn't make sense in my case, since home prices continuing to increase and me adding home improvements that increase the value of my home I will be able to refinance my loan in a little over 2 years to get rid of the PMI, and still have spent way less than the 20% down would have cost me.
Re:Home Price to Income Ratio
by mywittyname on Tuesday September 21, 2021 @01:51PM
(#28607653)
In general, I think it's a good tradeoff to pay PMI in order to get into a house earlier, or keep a larger down payment invested. PMI is generally <10% of the total mortgage payment and can be eliminated through appreciation, if one is willing to pay for an appraisal.
I waited in order to save the traditional 20% down payment, and, in hindsight, that was a dumb financial move. Investment returns would have outpaced what I was paying in PMI by 10x each year, and the place appreciated enough in two years that I could have refinanced with no PMI without putting any additional money in.
You end up paying more in the long run when you add on PMI. I think they are internally conflating "should be avoided" with "can't." I do that with personal things all the time when I tell myself I can't do something that I shouldn't, but actually can do.