The Motley Fool Discussion Boards
Personal Finances / Buying or Selling a Home
|Subject: Borrower vs. Lender paid PMI||Date: 4/15/2013 9:45 PM|
|Author: Easter2012||Number: 125089 of 128459|
Borrower Paid PMI on my loan would amount to $70/mo. The interest rate will be 3.5%. Purchase price is 150k, and loan amount is 142,500.
Interest rate on Lender Paid PMI is 4.125%.
If I go with Borrow Paid PMI, I will pay $30 extra per month until the PMI drops off. Then, I will continue to pay the same amount of money--however, since the PMI will be gone, there will be an extra $100/mo applied to the principal.
If I go with Lender Paid PMI, I will pay $100 extra per month for the life of the loan.
Can anyone tell me whether Borrow or Lender Paid PMI would be better in these scenarios? Also, does the equation change if we end up staying in the home less than 10 years?
|Copyright 1996-2017 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|