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RenaldoGarfunkel t1_iy94wu7 wrote

I would hold off on getting a house until you pay off the debt and have a good 3 to 6 months worth of expenses in savings. Then 20% Down on a 15 year loan to avoid PMI.

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dweed4 t1_iy9asq3 wrote

If you have good credit PMI is almost nothing per month. On a $350k loan our PMI is $40 a month. Hardly worth putting off buying a house until you can afford 20% down.

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ProspectiveHomeBuye OP t1_iy9cwxo wrote

Based on calculators that prospective lenders have given us, with our credit PMI would be less than $100/mo.

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raustin33 t1_iy9l65s wrote

> Then 20% Down on a 15 year loan to avoid PMI

There's a math problem here tho. Simply avoiding PMI could cost them in the long run.

How long will it take to save 20% while spending $2100/mo on rent? vs buying sooner and spending ~$200/mo on PMI?

20% isn't always the right call, though is ideal if you can swing it.

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xKimmothy t1_iy9wvvm wrote

Agreed. All our relatives were constantly spouting that idea at us, but when I did out the math for them, we'd have to work over 5 years with zero spending over bare necessities to save the 20%. We didn't want our life to look like that for 5 years just to save. We put 5% down and our PMI is 115/mo.

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EvanDrMadness t1_iyamyc4 wrote

Why stop there? They should just save up until they can buy the house in cash.

/s, saying "just save for 20% down and do a 15 year fixed loan" is not feasible for a vast majority of first-time homebuyers.

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