Timeline for Increasing downpayment v.s. Prepayment
Current License: CC BY-SA 3.0
12 events
| when toggle format | what | by | license | comment | |
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| Mar 17, 2018 at 1:24 | comment | added | JTP - Apologise to Monica♦ | We had a question in this, prob two years ago. 78% LTV will get rid of PMI, but only at the natural amortization. i.e. the day I close on the loan, I know when PMI ends. If done via payments, a new appraisal can be required or the bank can just drag its feet. I’ll look for the other question. | |
| Mar 17, 2018 at 0:34 | comment | added | quid | @HartCO I can't validate that anywhere either. It seems that once the loan principle amount is below 78% are required to remove PMI. qsp, PMI is private mortgage insurance. Essentially, it insures the lender against the borrower defaulting | |
| Mar 17, 2018 at 0:29 | comment | added | sean | @quid: sorry what is PMI? assuming I don't have to pay it or somebody will pay it for me. How the two options compare? | |
| Mar 17, 2018 at 0:28 | comment | added | Hart CO | Pretty confident that's incorrect, the 20k payment after 2 months would result in PMI being removed. | |
| Mar 17, 2018 at 0:23 | history | edited | quid | CC BY-SA 3.0 |
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| Mar 17, 2018 at 0:14 | comment | added | sean | @quid: thanks for the answer. I understand paying principal early is better, but how it compare to include it as part of the down-payment to reduce the loan? | |
| Mar 17, 2018 at 0:09 | comment | added | JTP - Apologise to Monica♦ | OP will not remove PMI until the natural amortization puts him at 80% LTV. Not worth it to put 10% down if one has such an aggressive prepayment plan. Just save to 20% | |
| Mar 17, 2018 at 0:02 | comment | added | quid | @HartCO well it would be like 2 years before there was 20% equity, but again, not worth redoing the formatting, I'd rather just delete the answer lol... This gets the general idea of the cascade effect of paying principle early. | |
| Mar 17, 2018 at 0:00 | comment | added | Hart CO | @JoeTaxpayer True, but just a couple months of PMI. | |
| Mar 17, 2018 at 0:00 | history | edited | quid | CC BY-SA 3.0 |
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| Mar 17, 2018 at 0:00 | comment | added | JTP - Apologise to Monica♦ | Doesn’t a sub-20% down payment require PMI? That would change the numbers. | |
| Mar 16, 2018 at 23:57 | history | answered | quid | CC BY-SA 3.0 |