Home buying thread

Keystone

Keystone

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To his point though if you are in a situation where you are able to purchase a home, pay mortgage with pmi included and still be comperable or sometimes cheaper than renting would be. At least some of that amount is going to equity in the home, plus appreciation, versus it all just poofing if you rent.
 
Noodleface

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The rent is used at least theoretically in maintenance and other shit while renting. Pmi is literally burning money
 
alavaz

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Noodleface said:
The rent is used at least theoretically in maintenance and other shit while renting. Pmi is literally burning money
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Maintenance towards someone elses shit. I'm not trying to say that I don't understand why you should desire to avoid pmi, but I also don't think it makes a person a total sucker for getting a pmi mortgage because all they have is a few percent down payment either. Because realistically, the only 2 options for avoiding pmi with a low down payment are VA and USDA - both obviously subject to their own restrictions and both of which charge a fee on the backend anyway.
 
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Tenks

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You seem to have the opinion where renting is always an incorrect choice and I don't agree with that. In fact I'd argue the most correct choice is renting until you can afford a reasonable down payment to get a proper mortgage without PMI riders.
 
Cad

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Why not do an 80/15 or other percentage dual mortgage to avoid PMI? I know it seems like a loophole... and you'll pay somewhat higher interest on the 2nd mortgage. Still cheaper/better than PMI, no?
 
Crone

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wormie said:
3% down? Arent you going to get ass reamed with MIP/PMI payments? Gross.
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About $120 a month, and it's directly to our bank, not FHA. I suppose where it goes doesn't matter, as I'm still paying it. Wells Fargo does it where it can be paid all at once or over 4 years. After 48 months PMI drops off automatically.
 
alavaz

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Tenks said:
You seem to have the opinion where renting is always an incorrect choice and I don't agree with that. In fact I'd argue the most correct choice is renting until you can afford a reasonable down payment to get a proper mortgage without PMI riders.
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No, not at all. Renting is great when you don't want to commit long term. I currently rent and plan to for another couple of years while I settle in.

The point I was making - which no one has countered - was that given a scenario where you could purchase with a pmi loan and have your payment (and home) be comparable to that of a rented home, what is the downside? Assuming of course you'll stay put long enough to build real equity.

This is a pretty realistic scenario too in lots of markets. I suppose getting two loans is the other option, but your down payment loan will be much higher interest than your mortgage.

I'm not positing this as a right/wrong. Just curious on people's thoughts. We're all going to do what we do regardless.
 
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Picasso3

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^ true point and reasonable however there always has to be someone to condescend when it comes to finances.

Pmi is tax deductible under certain incomes and rent isnt.

2 loans would open up to a payback scenario for additional closing costs I would think.
 
Xarpolis

Xarpolis

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wormie said:
I am a title agent in NYC. We close somewhere between 300 and 400 homes a year. I have been at this for about 10 years so I have seen quiet a few home purchases. I never understood why people agree to pay MIP/PMI. Might as well light the money on fire.
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It's not that you agree to pay it. It's that the mortgage isn't available unless you get it.

That is assuming that you don't take on a second mortgage for the balance needed to hit your 20% downpayment mark.
 
wormie

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Xarpolis said:
It's not that you agree to pay it. It's that the mortgage isn't available unless you get it.

That is assuming that you don't take on a second mortgage for the balance needed to hit your 20% downpayment mark.
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If you have to pay an insurance premium to be considered a worthy borrower, you might want to rethink being a borrower.
 
Xarpolis

Xarpolis

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Not at all. MANY people, myself included, didn't have enough saved to accommodate 20% of a house. However, I owned my house for 10 years. In that time I was never once late on a payment, and I always overpaid into the principle by around $400 every month. I was a great purchaser, but the terms of my loan were 100% financing. 0% down. I was broke as fuck, but finally owning a house caused me to become responsible. It's great once you put your mind to it, but it's difficult to get started.
 
A

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Yes PMI is throwing money away but I am paying less for owning than I was with renting due to it being a heavy military area where most people lease.
 
Noodleface

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alavaz said:
Maintenance towards someone elses shit. I'm not trying to say that I don't understand why you should desire to avoid pmi, but I also don't think it makes a person a total sucker for getting a pmi mortgage because all they have is a few percent down payment either. Because realistically, the only 2 options for avoiding pmi with a low down payment are VA and USDA - both obviously subject to their own restrictions and both of which charge a fee on the backend anyway.
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Sure but if a big ticket item goes that gets replaced free too. Obviously it's a balance between the two.

I'm of the mindset that more people should rent instead of buying.
 
alavaz

alavaz

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I'm of the mindset that people should do whichever makes more sense. Why should you pay someone elses mortgage and pmi for 10 years when you could be paying your own? On the flipside, if you know you are likely going to need to move for any number of reasons in a year or two, then yeah buying makes zero sense.

I think everyone is still thinking it's 2006 and there's this huge flood of people buying homes who can't afford them. The last few years have been probably the best time there ever will be to buy a home. I mean when you guys save up that %20 and get yourself a %7 interest mortgage in 10 years that "not worthy" 3% down dude will probably have long dropped his PMI and still have a 4% mortgage.
 
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Keystone

Keystone

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Noodleface said:
Sure but if a big ticket item goes that gets replaced free too. Obviously it's a balance between the two.

I'm of the mindset that more people should rent instead of buying.
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And that big ticket item needing to be replaced eventually is factored into the amount of rent they are charging you as well. You are essentially as he said paying their upkeep / maintenance and building 0 equity that way.

There are definitely arguments to be made for renting over buying. Primarily if you're moving in the short term, or if you are able to rent a place for significantly cheaper than you would buy (if you are investing that money at least). Where I live you're looking at ~1400/month to rent a single family home on the low end though versus being able to buy something for ~180K at ~1200/month including PMI, property taxes, insurance. The second option is not only cheaper but also builds ~$300/month in equity in the home. I'd love to hear how renting is superior to buying in a case like this?
 
wormie

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alavaz said:
I'm of the mindset that people should do whichever makes more sense. Why should you pay someone elses mortgage and pmi for 10 years when you could be paying your own? On the flipside, if you know you are likely going to need to move for any number of reasons in a year or two, then yeah buying makes zero sense.

I think everyone is still thinking it's 2006 and there's this huge flood of people buying homes who can't afford them. The last few years have been probably the best time there ever will be to buy a home. I mean when you guys save up that %20 and get yourself a %7 interest mortgage in 10 years that "not worthy" 3% down dude will probably have long dropped his PMI and still have a 4% mortgage.
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So paying someone else's mortgage is bad but paying someone else's insurance is fine?
 
alavaz

alavaz

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wormie said:
So paying someone else's mortgage is bad but paying someone else's insurance is fine?
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I don't even know where you are trying to take this or why people still think I'm saying one thing good other thing bad. I asked a question about a realistic scenario and everyone is just evading it.
 
wormie

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alavaz said:
I don't even know where you are trying to take this or why people still think I'm saying one thing good other thing bad. I asked a question about a realistic scenario and everyone is just evading it.
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Just trying to get a handle on your position. You are saying that its ok to pay expenses of one party but it makes no sense to pay expenses of a different party. Seems strange to me.
 
Noodleface

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Keystone said:
And that big ticket item needing to be replaced eventually is factored into the amount of rent they are charging you as well. You are essentially as he said paying their upkeep / maintenance and building 0 equity that way.

There are definitely arguments to be made for renting over buying. Primarily if you're moving in the short term, or if you are able to rent a place for significantly cheaper than you would buy (if you are investing that money at least). Where I live you're looking at ~1400/month to rent a single family home on the low end though versus being able to buy something for ~180K at ~1200/month including PMI, property taxes, insurance. The second option is not only cheaper but also builds ~$300/month in equity in the home. I'd love to hear how renting is superior to buying in a case like this?
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I think 1400 is the true cost of living of an apartment where 1200 is not true cost of home living. I get your point
 
alavaz

alavaz

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wormie said:
Just trying to get a handle on your position. You are saying that its ok to pay expenses of one party but it makes no sense to pay expenses of a different party. Seems strange to me.
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See you are drawing the wrong conclusion. I'm not saying anything about ok or not ok. I'm asking why people think that PMI is this big money dumpster fire to be avoided in all situations. I then presented a situation where it seems reasonable to me to have PMI and everyone thus far (who was in the pmi is bad camp) has just danced around it by saying I think renting is "bad," - which I never did.
 
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