2nd Mortgage?

Hello everyone,

I have a question.  I am about to purchase a home and was wondering what I could do if I didnt have the necesary 20% down in order to avoid the PMI payment.  Would it be wise to get a 0% down loan, then get a higher second mortgage in order to avoid the PMI payment, then pay off the second mortgage first (since it is a higher rate), then start paying on the first mortgage?  I have excellent credit (752), but this is my first home purchase.  I have a very steady job and am not worried about paying off either mortgage as I will sell the house in just two years.

If you plan on selling the house in 2 years, I think it would probably be cheaper to pay the PMI than the closing fees + higher interest for the second mortgage.   There are also government grants available for first time homeowners that could cover a good percentage of that down payment (depending on how expensive of a house).

Ome thing to worry about when it comes to second mortgages is the fact that you will be putting your home at risk

I think Jeremy is right since you don't plan to own the home that long. If you want to get out of paying the PMI sooner, if you can, put a little extra money each month directly towards the principle. I think it's called "a principle only payment". You'll be surprised how quickly this will lower the amount owed on the principle.