{ "media_type": "text", "post_content": "What mortgage rate makes more sense?\nFirst time home buyer with credit score upper 700s SFH main residence putting 5% down. \n\nScenario A: $800 origination fee, 2.75% rate + PMI\nScenario B: $0 fee, 3.25% rate, no PMI\n\nI think after doing the math, with the no PMI I pay $60 more in interest a month, but with the PMI I pay $105. So the no PMI is only $45 cheaper. Is this a no brained to go with the rate + PMI since I only save $45 a month but after I reach 20% equity I can drop the PMI?", "post_id": "5fea420d40734b0024898db9", "reply_count": 27, "vote_count": 1, "bowl_id": "5a5242b78e26290018502ca0", "bowl_name": "The Real Estate Bowl", "feed_type": "bowl" }
null

What mortgage rate makes more sense?
First time home buyer with credit score upper 700s SFH main residence putting 5% down.

Scenario A: $800 origination fee, 2.75% rate + PMI
Scenario B: $0 fee, 3.25% rate, no PMI

I think after doing the math, with the no PMI I pay $60 more in interest a month, but with the PMI I pay $105. So the no PMI is only $45 cheaper. Is this a no brained to go with the rate + PMI since I only save $45 a month but after I reach 20% equity I can drop the PMI?

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Go with B.. Refinance (with zero closing cost) when you reach 20%. Rates are most likely not going anywhere.
This will depend on loan amount and couple of other factors.

Both rates include closing costs. I DMed you by the way

In which market are you able to put only 5% down (sorry if silly question, I’m new and have only looked in NY market that requires 20%)

NY does not require 20% down

You can put down less than 20% and avoid pmi?

You can buyout PMI. I just did that. It was better to pay upfront for me; I paid $3200 to buyout vs 130 monthly. Is going to take a couple of years to break even, but assuming I hold the property longer than that it seems to make more sense. Also, in my case paying monthly and assuming normal inflation I wouldn’t reach 20% equity until 8 year when it would fall off in its own.

I did a month ago. I had 2.75 with PMI or 2.875 no PMI. Rates were steadily changing though.

Local to SE... Angel Oak. Happy to make an intro if you’re purchasing in this region.

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