On a $300K mortgage to avoid pmi is it better to put 20%down or to get a 80/20 loan?

Answer 1

Both methods avoid PMI. But putting 20% down is better than an 80/20 loan because it costs you less at the end of your loan, you save more on interest.

Answer 2

It depends on what else you would do with the 20%. The bottom line is that the most expensive part of a house to finance is the last 20%. You either have PMI, an increased rate because the lender is financing the PMI, or a second mortgage with a higher rate. If you can put the 20% down without cramping the rest of your financial style, that's generally a good idea.

Final thought, put down 10% and do a one-time PMI payment.

Answer 3

It would be better to put 20% down if you have it to avoid PMI. On an 80/20 loan you will avoid the PMI cost but you are going to pay a higher interest rate on the 80% 1st mortgage, and 20% 2nd mortgage. If you have the 20% down to put down specifically for your home, then this will assure that you will avoid PMI and get the absolute best interest rate available.

Answer 4

You'll avoid PMI either way. Putting 20% down will always cost less than an 80/20 or paying PMI. An 80/20 will USUALLY cost less than PMI but watch out for 2nds that have a variable rate and a short lockin period! Those can eat your lunch if you're not careful!

Answer 5

the only thank you to ward off paying PMI is do to do a piggyback of 80/20 (or in spite of quantity OVER 80% you're borrowing. 80/20 loans are nevertheless attainable, however the talents are greater durable immediately than they have been say a 12 months in the past. although, evaluate your average money going 80/20 vs. one loan @ one hundred% plus PMI or MIP (if FHA). the best information is PMI is NOW tax deductible while in the previous is became into not. So, in the experience that your average charge is decrease with the PMI take that loan offering because of fact as quickly as you paydown the loan to seventy 8% the PMI would be dropped by potential of the lender. good good fortune

Answer 6

It all depends on the bottom line. I got two qoutes on each of my recent loan. One 95 % ltv with pmi included was 3045 per month, the other 95 % ltv with pmi included was 3094. The other two loans were 80/15 with 5 % down and totaled 2960 and 2880. I obviously took the mortgage with 2880.00 per month. BUT, dont forget to make sure all the other things are equal like pre-pmt penalties, rate lock period, points bought, etc.

Answer 7

if you get an 80% first loan & a 20% second loan you WILL avoid PMI

You do not have to put 20% down to avoid it.

If you had a 85% first or higher, you will have mortg. insurance.

You CAN get 100% financing without PMI w/ the 80%1st.