With a conventional loan, you don’t pay any up-front PMI at closing; and you are not locked into the PMI; after 2 years (some lender 1) you can have your house re-appraised, and if you are now 20% equity, you are rid of the PMI.
I suggest doing neither – don’t wait till you’re 20%, and don’t buy w/ an FHA.
Is it better to put 10 or 20 down?
Putting 20 percent or more down on your home helps lenders see you as a less risky borrower, which could help you get a better interest rate. A bigger down payment can help lower your monthly mortgage payments. With 20 percent down, you likely won’t have to pay PMI, or private mortgage insurance.
Should you put down 20%?
20% is good — but not mandatory
The fact is, 20% down payments aren’t strictly required, but they may be a good idea. Good reasons to put down at least 20% include: You won’t have to pay for mortgage insurance. You’ll likely earn a lower mortgage interest rate.
Is 20 down payment important?
According to Nicholas, if you can comfortably put down 20%, you won’t need PMI, which will save you money and lower your monthly mortgage payment. “You don’t want to be house-rich and cash-poor—feeling comfortable and confident with the decision you make is the most important factor of all.”
How can I avoid PMI without 20 down?
To sum up, when it comes to PMI, if you have less than 20% of the sales price or value of a home to use as a down payment, you have two basic options: Use a “stand-alone” first mortgage and pay PMI until the LTV of the mortgage reaches 78%, at which point the PMI can be eliminated. Use a second mortgage.