Ready-Interview-9809 t1_j9gi79v wrote on February 21, 2023 at 7:57 PM

Reply to comment by occasionally_ganache in As of Aug 2022, the median millennial household income was $106,661. People making at or close to the median household income that are buying houses in MA, where are you able to buy? by BoOo0oo0o

Whatever percentage you need to avoid PMI is gonna make the difference. Look it up.

rakdoc t1_j9guwku wrote on February 21, 2023 at 9:55 PM

I pay 66/ month for PMI. it’s boring if you have heat great and solid income. it’s 1/50 of my mortgage

WinsingtonIII t1_j9hftbv wrote on February 22, 2023 at 12:15 AM

PMI is not nearly as big of a deal as people make it out to be. Mine is like $70 per month, I pay more for my cable/internet bill. That's hardly a big deal when you consider what your mortgage will be in most parts of MA anyways.

I don't think there are many situations in a high housing cost state like MA where someone could otherwise afford the mortgage on a house but can't because of the PMI amount.

Ready-Interview-9809 t1_j9hjaoi wrote on February 22, 2023 at 12:39 AM

I was replying to the “10-20% down” comment. Noting that if someone had the option to put 10-20% down, whatever percentage to avoid PMI would save ( for you $70x12=$840/yr ) and be the better option.

WinsingtonIII t1_j9hpvle wrote on February 22, 2023 at 1:27 AM

Sure, that said I do think in such a crazy housing market you have to consider the opportunity cost of delaying your home purchase to save up the necessary down payment to hit 20%. But yes, if you can already afford 20% then there's no reason not to just put down the 20%.

We bought three years ago and put down around 10%. If we had waited to save up for 20%, we'd still be saving and wouldn't be able to buy yet. Meanwhile, the value of our house has increased by $100,000 in that same timeframe and the interest rates have skyrocketed. We simply wouldn't be able to buy this house today, whereas we could three years ago.

Paying $840 per year for ~6 years to be locked into a sub 3% interest rate mortgage on a house that cost $100,000 less than it would today is absolutely worth it. The difference in list price and interest rates if we bought today would easily exceed the $70 per month we are paying in PMI.

Ready-Interview-9809 t1_j9hr4m7 wrote on February 22, 2023 at 1:36 AM

Totally

occasionally_ganache t1_j9gjrev wrote on February 21, 2023 at 8:09 PM

20% is the amount to avoid pmi, I know because I literally pay pmi

Cupcake-Mountain t1_j9iyd0s wrote on February 22, 2023 at 8:25 AM

There are loans where you only need 3% to avoid pmi. I know because I only put down 3% and don’t have pmi.