2006-12-28 04:20:46 · 10 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
I'd say get a 80% first and eliminate the PMI entirely, you can get a Line of Credit 2nd to close the funding gap and put your 65K into a CD that can pay you monthly interest instead. That combined with the saved PMI payment will nearly cover your payment on the 2nd. Once your Line of credit has been paid down or off you can still have it available to use without the refinance costs associated with a home equity loan.
2006-12-28 04:55:17 · answer #1 · answered by Kevin H 4 · 0⤊ 0⤋
Well there really is no reason to pay PMI regardless. You can do an 80/20 mortgage. A 80% primary, or first, mortgage and a 20% second. This eliminates the need for PMI, any mortgage broker should be able to accomodate that request.
How much should you actually put down and how much to invest? Well put down as much or as little to get to a comfortable mortgage payment.
If you feel you are a wiz at investing then you should invest as much as you there, since a good investor will always outpace the real estate market.
2006-12-28 13:23:49 · answer #2 · answered by Anonymous · 0⤊ 1⤋
What are you investing in? Is the yield likely to be more than what you'd be saving with the PMI? How secure is this investment?
One factor that you might want to consider is that PMI, if you make less than $100k a year, will be tax deductible come January 2007, as ruled by Congress on December 9th, 2006.
As for getting a second, that is a bad idea. If you're going to invest the money, why pay the interest on a second mortgage when you have the money in hand?
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2006-12-28 13:07:42 · answer #3 · answered by baconshmals 2 · 0⤊ 0⤋
the 80/20 idea is bad if you actually have the money to pay the 20%. You are going to have a home equity loan with 8%+ rate? You are not going to get that on your investments. Just pay the 20% down and invest the rest (for a rainy day). If you find your investments are not doing well, or you have enough money in the bank, then pay down your mortgage.
2006-12-28 14:51:15 · answer #4 · answered by NYC_Since_the_90s 6 · 0⤊ 0⤋
Investments are rather modest right now. They will continue to do so because the US will have to begin paying off the debts to China we incurred from the Iraq war loans. That means investments won't have the cash flow required to keep them really hight.
So give the money to eliminate the PMI. The money you save on PMI is more than the investment you would earn in this economy.
2006-12-28 12:30:13 · answer #5 · answered by hawkthree 6 · 0⤊ 1⤋
You have to look at the opportunity cost of the money. If you invest it, will you earn more (after tax) than you are paying for PMI? If you can, then you should invest it. If not, then you should pay down the mortgage to get rid of the PMI.
2006-12-28 12:24:58 · answer #6 · answered by jseah114 6 · 0⤊ 0⤋
Pay down the mortgage and take the difference in the payments and invest that every month in a mutual fund or similar investment
2006-12-28 12:25:30 · answer #7 · answered by Anonymous · 0⤊ 0⤋
One, how much is your PMI and how much can you realistically expect to make on investing the same amount?
Ask your accountant.
2006-12-28 12:24:47 · answer #8 · answered by mottthedog 6 · 0⤊ 0⤋
I'd pay down the home. That's a sure thing. Investments can/do go wrong.
2006-12-28 12:24:37 · answer #9 · answered by Anonymous · 0⤊ 0⤋
do the 80-20 arm and take for 30 years !!!!!!!!!
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2006-12-29 01:00:27 · answer #10 · answered by kishaloy_bhowmick 2 · 0⤊ 1⤋