Buying A Home
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
PMI is a joke
DH and I didn't have 20% to put down for a down payment so we're paying $168 a month extra in PMI because of it. I just don't get the need for 'private mortgage insurance' when I think their insurance would be that they can take our house if we don't pay.
I just don't get it and need to get this dropped ASAP!
vent over
Re: PMI is a joke
Yea...this is why we saved until we hit that magic number of 20%....PMI is just throwing money out the window....
Sorry that you guys are paying it
I'm going to look into this becuase I thought PMI was until you own 20% of your home and we've made a lot of updates so I was hoping to have the home reassessed in a year or 2
From the FHA Site -
For mortgages with terms more than 15 years, the annual mortgage insurance premiums will be canceled when the Loan to Value ratio reaches 78 percent, provided the mortgagor has paid the annual premium for at least 5 years.
http://www.fha.com/fha_requirements_mortgage_insurance.cfm
No one forced you to buy a home with less than 20% down. It was your choice.
PMI is there to protect lenders if the borrower defaults. As we've all seen over the last 4 years, house values can and do fall. Lots of lenders have lost significant amounts of money because the homes they foreclosed on are worth less that what they lended out in the first place. And when they lose money, there is less to lend to those who were patient, saved up 20%, and present a lower lending risk. So yeah, I'm all for PMI and for people making the decision that is best for them. I'm just not for griping about the decision that you willingly made.
I am pretty sure she understands that. She did say she was venting. It's okay to let people vent sometimes.
Not everyone is able to save 20% for a downpayment, especially in HCOL areas. The house we're buying is 300k so I would have to have 60k for a downpayment plus another 30-40k in reserves just for us to feel comfortable. It would take us years to save that much and we wouldn't be able to take advantage of the crazy low interest rates or the current housing prices. PMI sucks to pay but it's not forever.
I agree. It would take us at least 10 years to save 20% on a very low priced house where we live....that's if no emergencies come up and we'd have to use the money for other purposes. Meanwhile, all our money is going down the crapper to nowhere as we pay for rent. Do what works and is smart for you. If you can save that money in just a few years, do it. If not, pay the PMI and think of how much you're still investing in your future by not paying rent.
Its definitely a necessary evil for some of us. And I had one or two associates that looked down on that but for anyone to think that if you don't have 100K cash to put down on a home then you should rent forever or live in a shack is pompus and obnoxious.
Our home was 390K and that WAS the cheapest home we found for the size that we needed and even though we paid more than the 3.5% we def were NOT going to put down damn near 80K! I would much rather have in extra cash in my pocket. Its going back into saving and for family needs (and a few wants)
Plus with PMI our PITI is around 2500 And we would MUCH rather that then to keep paying the 2000 we were paying in rent, with truly nothing to show for it. So does it suck sometimes? yes., but remember in the long run its worth it, especially when you have children. We are very happy with our decision to do things the way we did
I live in the DC metro, so trust me when I say that I know HCOL. Houses in our zipcode generally start at $600k. That's why we saved. I started saving for a house when I was 23. I haven't vacationed since 2005. Mr. LK and I skipped a honeymoon and did a 30 guest wedding so that we could pay for everything ourselves in cash without touching our house savings. We eat out once a week. etc.
Like I said, I am all for people making the decision that is right for them, whatever that decision is. It just bothers the heck out of me when people then gripe over the decision that they made. If you don't like the decision, why did you make it? It's not as though PMI is somehow a surprise that no one tells you about until after youve signed all of those papers on closing day! When you make a decision, own it and be happy that you have options and were able to choose what was right for you. Don't gripe about something that protects a lenders ability to continue making higher risk loans to other people who are making the same decision that you did.
I agree with both sides. PMI is ridiculous given that the house would be foreclosed on regardless. It is not like paying this would offset the balance owed if you hit rough times. It is not really insurance for anyone but more of a penalty for not having 20% in cash. It's like a convenience fee.
I also agree that people need to have that skill of saving when it comes to home ownership. When you own a house, you shouldn't be paycheck to paycheck. What if something major happens??? How would you pay for it if you don't have the savings? In my area, 20% is alot also. I have an incredibly high credit score and feel this should demonstate that I know how to pay bills on time. For this, I truly hate paying PMI.
The solution in my eyes...stop offering settlement help so people do have to learn to save and waive PMI for high credit scores.
I totally agree. Our Mortgage, Taxes, HO Insurance, and PMI all together are only $3 more per month then we were paying in rent.
The PMI will eventually drop off. Then I'm at $221 less per month then my rent was