Posted on
January 14, 2008
at
10:10 am
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.
Posted on
January 14, 2008
at
2:01 pm
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).
Posted on
April 11, 2008
at
12:15 am
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.
