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Old 05-01-2018, 08:09 AM
 
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Put 20% down and you won't have to worry about this.

There's a reason why "mortgage insurance" is required for loans with less than 20% down; it covers the expenses to the lender should the borrower default and they have to repo and sell the property.
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Old 05-01-2018, 08:31 AM
 
Location: Great White North Hills
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Not everyone has 20%.
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Old 05-01-2018, 08:41 AM
 
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Quote:
Originally Posted by LifeIsGood01 View Post
I've never heard of HomePossible, but I've seen HomeReady online before. 80/15/5 sounds interesting too, I had never heard of that either, but anything where the mortgage insurance is not in the loan or only for a certain period of time is much better than FHA.
80/15/5 allows you to pay a higher interest on the "15" portion of the loan in lieu of PMI. Just throw lots of extra money at that smaller loan every month and kill it as soon as you can. Then your mortgage payment will be more reasonable...
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Old 05-01-2018, 08:45 AM
 
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Originally Posted by Copanut View Post
Not everyone has 20%.
Then you should rent.
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Old 05-01-2018, 09:45 AM
 
Location: Great White North Hills
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Originally Posted by Sharpydove View Post
Then you should rent.

Why? I always buy property with the least amount of cash out of my pocket. The OP did it with minimal down payment with full knowledge of the downside, his choice. I still own my first FHA property, debt free and a great money maker. Why put down more than necessary?
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Old 05-01-2018, 10:10 AM
 
12,392 posts, read 9,129,415 times
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Originally Posted by Copanut View Post
Why? I always buy property with the least amount of cash out of my pocket. The OP did it with minimal down payment with full knowledge of the downside, his choice. I still own my first FHA property, debt free and a great money maker. Why put down more than necessary?
I thought we were already discussing this. Putting more down avoids PMI and gives you an equity cushion in case the market goes down a bit. Another benefit is that you generally can't get 4%+ returns risk-free on your money, but by putting more money down, you can achieve that effect.
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Old 05-01-2018, 10:38 AM
 
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Originally Posted by Sharpydove View Post
Then you should rent.
Buying is cheaper. My FHA mortgage that I got 2 years ago cost me less than renting a room in someone's house.
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Old 05-01-2018, 10:39 AM
 
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Look, there can be reasons to take a mortgage with minimum down. In that case you will be required to pay PMI. Or, you can put 20% down and not pay PMI. What you shouldn't do is to take a mortgage with minimum down, which everyone knows will require you to pay PMI, and then gripe about it. If you want to avoid the situation that makes you complain, put 20% down.
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Old 05-01-2018, 10:41 AM
 
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Originally Posted by ncole1 View Post
I thought we were already discussing this. Putting more down avoids PMI and gives you an equity cushion in case the market goes down a bit. Another benefit is that you generally can't get 4%+ returns risk-free on your money, but by putting more money down, you can achieve that effect.
My property appraised for 14% above what I paid and is now worth 60% more just 2 years later.
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Old 05-01-2018, 10:42 AM
 
10,237 posts, read 6,389,860 times
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Originally Posted by ncole1 View Post
I thought we were already discussing this. Putting more down avoids PMI and gives you an equity cushion in case the market goes down a bit. Another benefit is that you generally can't get 4%+ returns risk-free on your money, but by putting more money down, you can achieve that effect.
No your point was if you can't put 20% down than rent and that is not smart. When you rent you make your landlord richer, when you buy you increase your own net worth.
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