Portal Forum General General Discussion Home Ownership Reply To: Home Ownership

#153554 Quote

    @dryfly wrote:

    @MNGophers29 wrote:

    As for the 20% down mentality, while I understand where DX is coming from, I wholeheartedly DISAGREE with that. Its all about debt to income ratio

    ^THIS… the ability to service fixed cost obligations of which a mortgage is most people’s largest obligation trumps all else. That 20% down everyone talks about is a cushion for the bank in case they need to foreclose and resell – covers a lot of their expected costs. Plus people are a lot less likely to ‘mail in the keys’ [lenders call this ‘jingle mail’] when times are difficult if people have some skin in the game [20% is a psychological threshold it seems – below which walkaways are more likely]… but even if they scratch together 20% it really doesn’t mean they can afford the house. Just means the bank is more likely to let them take the chance they can or can’t.

    I never said that 20% down was the only measure. Not sure where you managed to get that idea.

    An FHA mortgage and PMI can be substantially more expensive than a conventional. Not just a few bucks more a month.

    And as I remember it, if you get an FHA loan, you can’t remove pmi just by building equity. You have to make a certain number of payments before you can get it without refinancing.

    This site seems to back that up.

    And PMI is not cheap.