wait or PMI

[rubu]

Hi All,

I started searching for a house and was in max budget for 350K. I was all set for 20% down in another 2 months to the future. We came across this great house which is 20K more than our max budget. We love the house because there is nothing to spend everything is done as if custom made for us. So the question here is should I got with the PMI or should I forget the house and wait until i get 20% down (which would take me another 4-6 months).  Lender says that they could do a fully refunded PMI where if I pay the 20% down in few months they would be able to remove the PMI fully. I will possibly will not have a chance at this house. I am very responsible individual and do not want to risk finances over emotions. 

I do not trust lenders so would like to have some input from the experts here.

[BCullum]

I've never heard of a lender doing that... Hopefully one of our resident LO can chime in and give you an answer.

[rubu]

well I thought lender was not doing anything special because once I pay 20% of the house shouldn't PMI cancel? for me it would be few months? 

[BCullum]

Just did some research, and I guess its true. My take on it, if you can indeed take on the added payment for those extra 4-6 months and its a house you really love. I say go for it, as long as your DTI is in line. 

[rubu]

Yeah need to go and ask more questions with regards to the PMI......from the Lender.....I am really upset....Damn I thought I had enough money....Guess not. I have about another 18K saved and it is my emergency fund and do not want to touch it.

[TnTNYC]

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@rubu wrote:

Lender says that they could do a fully refunded PMI where if I pay the 20% down in few months they would be able to remove the PMI fully.

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So, is the lender saying they will refund the PMI you pay, not just cancel it?  What happens if, for some reason, you don't hit the 20% by the time they need you to?  Any penalties or waiting period associated with that?

[JM-AM]

So what you are thinking of doing is instead of paying 20% down, pay the difference in the additional cost of the house and accept a lower down payment and pay PMI?

While you may be dedicated (I know we were), it is not an easy road. Personally from my own experiences I would not rush to buy anything because you are thinking the house may not be available any longer.

First, every Seller, Builder, Realtor, LO, or Broker always makes it out to be this house is prime and not going to be on the market long. While this may be true, the majority of the time the home will sit for several months and sometimes years. Many different things play into comparison of why and how come a home sits on the market and doesnt sell. It may very well sell right away, but still in my opinion not something to jump on.

Even if I was considering it, I for sure would not offer selling price, so that may save you a few dollars there. If you do your homework, you may be able to offer just a little more then what you were thinking on spending, but you need to know the going rate for homes of comparable values. Need to learn how long the homes are sitting on the market before being sold. Need to know several other things to make the best bonified offer in your opinion. While using a Buyers Realtor is a good thing, you still need to make sure they are giving you suggestions on what is in your best interest, not their commission interest.