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This is my situation: I live in a house and am thinking about moving (want to be closer to work) I wont move until I sell my house first since I want to sell the house on my terms and not have the stress of 2 mortgages.
If my house sells for a reasonable price, I could probably squeeze a 20% downpayment into a ~175K house. However, I am thinking of gettig a 200K house.
If I get the 200K house, do you think it is better to cough up the PMI or get a HELOC? If I get the PMI, should I try to put down as much as I can, (and not have much savings except my 401k) or should I borrow more?
What is the avg rate for the HELOC or a piggyback mtg?
Do you think the HELOC is cheaper than the PMI? I hate the idea of paying for PMI, but PMI should be easier to get rid of than the HELOC.
Any ideas?
Also, do you think if I can get a house for 20% down, I should do that instead and totally bypass the PMI/HELOC piggyback mtg?
In order to answer the question, it honestly would depend on more information. Credit score now is a big factor in pmi and in a heloc, and could knock you out of the heloc range. and force you into pmi, it could also make the pmi out of reach for some because the mi co's are now basing the factors on score along with ltv, property usage and the regular criteria they've always used. I've had a couple loans get ugly for pmi alone over the past few months because of the changes.
You can put 5-10% down..and have Lender Paid PMI (LPMI)
You will have 1mortgage, and not have to worry about paying PMI or a higher interest rate on the 2nd loan.
If today's 30yr mortgage rates are at 5.375-5.5%...you should get at least 5.625-5.75% for the LPMI mortgage.....
This will depend if you have a 700 score...and how much you are willing to put down.
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