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Old 04-14-2015, 08:50 AM
 
Location: Sugarland
13,230 posts, read 11,764,006 times
Reputation: 15258

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Quote:
Originally Posted by AmFest View Post
Yes but how much would the increase in interest rate cost you per month?
I don't know yet. I've only received estimates on the scenario where I would pay the PMI. I intend to go with whichever scenario results in the lower monthly mortgage payment.
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Old 04-14-2015, 09:06 AM
 
Location: Sugarland
13,230 posts, read 11,764,006 times
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Quote:
Originally Posted by ncole1 View Post
If you're so concerned with right now then why buy a house at all? If you are thinking short term, then better to keep your downpayment cash liquid and rent.
I'm thinking about right now because right now matters. I want a mortgage payment that I'm happy with from the start, so the idea of PMI dropping off eventually isn't all that comforting to me.
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Old 04-14-2015, 10:16 AM
 
2,409 posts, read 2,489,978 times
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Quote:
Originally Posted by Sweet Like Sugar View Post
I don't know yet. I've only received estimates on the scenario where I would pay the PMI. I intend to go with whichever scenario results in the lower monthly mortgage payment.
I bet the difference is smaller than you'd think. It is likely in the 20-30 dollars/month range, which really wouldn't make much of a difference in how much house you can afford, especially after you factor in the tax deduction. But keep me posted when you figure out the exact number.
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Old 04-14-2015, 10:26 AM
 
Location: Sugarland
13,230 posts, read 11,764,006 times
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Quote:
Originally Posted by AmFest View Post
I bet the difference is smaller than you'd think. It is likely in the 20-30 dollars/month range, which really wouldn't make much of a difference in how much house you can afford, especially after you factor in the tax deduction. But keep me posted when you figure out the exact number.
The online mortgage calculator showed the higher interest rate scenario to be better, so I was going by that. Of course I had to make up the rate since the lenders are so secretive about that too even though they've already pulled my credit.
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Old 04-14-2015, 10:53 AM
 
2,409 posts, read 2,489,978 times
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Quote:
Originally Posted by Sweet Like Sugar View Post
The online mortgage calculator showed the higher interest rate scenario to be better, so I was going by that. Of course I had to make up the rate since the lenders are so secretive about that too even though they've already pulled my credit.
Your lender should not. Ask them.
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Old 05-19-2015, 09:44 AM
 
Location: Sugarland
13,230 posts, read 11,764,006 times
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Quote:
Originally Posted by AmFest View Post
I bet the difference is smaller than you'd think. It is likely in the 20-30 dollars/month range, which really wouldn't make much of a difference in how much house you can afford, especially after you factor in the tax deduction. But keep me posted when you figure out the exact number.
You're right. The interest rate they quoted for LPMI is 4.5% vs. 3.75% for PMI, so the monthly mortgage amount ends up being only a few dollars less with LPMI...guess I won't be going that route after all.
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Old 05-19-2015, 10:02 AM
 
4,543 posts, read 11,547,065 times
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Quote:
Originally Posted by Sweet Like Sugar View Post
You're right. The interest rate they quoted for LPMI is 4.5% vs. 3.75% for PMI, so the monthly mortgage amount ends up being only a few dollars less with LPMI...guess I won't be going that route after all.
Guessing you are doing a relatively small loan. The rate difference on most of the LPMI deals I have done is .375-.500% higher and the payment reduction can be pretty substantial.
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Old 05-19-2015, 10:40 AM
 
Location: Sugarland
13,230 posts, read 11,764,006 times
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Quote:
Originally Posted by TimtheGuy View Post
Guessing you are doing a relatively small loan. The rate difference on most of the LPMI deals I have done is .375-.500% higher and the payment reduction can be pretty substantial.
I expect the loan amount will be between 230K-250K, but I haven't found a house yet!
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Old 05-19-2015, 11:28 AM
 
12,404 posts, read 9,203,248 times
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Quote:
Originally Posted by Sweet Like Sugar View Post
With the LPMI, my monthly mortgage payment would be less than what it would be with PMI. I understand that PMI doesn't last forever, but I'm concerned with right now. Someone above mentioned that I could have found a cheaper house, but I'm having problems finding what I'm looking for and having a bit more flexibility to increase the sales price would help.
If you are only concerned with cash flows in the near terms, you shouldn't buy at all, you should rent. Even if PITI would be less than rent, if you amortize your down payment over a short period such as 3 years, you almost certainly will be out of pocket more by buying than by renting.

It is true that this ignores the long-term impacts, but if this concerns you, then you are not really "concerned mainly with the near term" after all.

Which is it?

You seem to be taking conflicting positions simultaneously.
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Old 05-19-2015, 11:34 AM
 
Location: Sugarland
13,230 posts, read 11,764,006 times
Reputation: 15258
Quote:
Originally Posted by ncole1 View Post
If you are only concerned with cash flows in the near terms, you shouldn't buy at all, you should rent. Even if PITI would be less than rent, if you amortize your down payment over a short period such as 3 years, you almost certainly will be out of pocket more by buying than by renting.

It is true that this ignores the long-term impacts, but if this concerns you, then you are not really "concerned mainly with the near term" after all.

Which is it?

You seem to be taking conflicting positions simultaneously.
See post #22 where I previously responded to you on this issue.
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