cancel
Showing results for 
Search instead for 
Did you mean: 

How much of a house should I buy.....?

Valued Contributor

Re: How much of a house should I buy.....?

Okay well if you go conventional, you will most likely get a better interest rate than going FHA. So I would do that. If you can comfortably put down 22% to avoid the PMI on a $379K house, I would do that as well.

Tooleman mentioned another option through conventional regarding the ability to pay up front PMI and be done with it. I don't know what the downpayment requirements are for this.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Message 21 of 36
Valued Contributor

Re: How much of a house should I buy.....?

Never mind. I just saw tooleman said it requires 5% down. But what is LPMI?
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Message 22 of 36
Valued Contributor

Re: How much of a house should I buy.....?

LPMI is lender paid mortgage insurance.

 

You can either pay an upfront fee or no fee but you take a hit on your interest rate.

 

This is one of the cool things about doing a conventional mortgage, you just pay the fee upfront and its done.

 

I think the fee is somewhere around 2 percent of the loan. So a 350k mortgage it would be a 7000 upfront fee. It is a good deal.

Message 23 of 36
Valued Contributor

Re: How much of a house should I buy.....?

Interesting. So the LPMI is paid by the lender on your behalf until 78% LTV if you just pay the upfront fee and put 5% down?
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Message 24 of 36
Valued Contributor

Re: How much of a house should I buy.....?

You could do 3 percent down as well. Yes the lender pays the MI for you.

Message 25 of 36
Valued Member

Re: How much of a house should I buy.....?

Thats great information...I should for sure do...10% down and buy PMI directly. I will find out the information....

Message 26 of 36
Valued Member

Re: How much of a house should I buy.....?

Message 27 of 36
Highlighted
Valued Contributor

Re: How much of a house should I buy.....?

Kind of, you can take a higher rate if you want. But I think the better way is to pay the fee and keep the rate low.
Message 28 of 36
Valued Member

Re: How much of a house should I buy.....?

So essentially I am paying a fee and more on interest because the borrowed amount becomes bigger?

 

Thanks.

 

Message 29 of 36
Valued Contributor

Re: How much of a house should I buy.....?

A fee or higher rate.

You pick which way you want to go.
Message 30 of 36