Hacker News Reader

Comment by ceejayoz | Hacker News Reader

Taking an FHA loan and not needing the 20% downpayment is also an option.

Got a VA loan but payed the down anyway to avoid PMI. Interest on VA is pretty low and it's awesome to get the initial balance down a little.

Paying a little more per month toward the balance is also a great way to save. Bad idea to base home-buying choices merely on what payment you can afford to pay every month.

VA loans shouldn't have PMI.

Sorry, not PMI...if you go zero down, you have to pay a funding fee, and it's pretty substantial. If you put a down, you don't pay the funding fee and the money goes toward your balance instead.

I was getting my wires crossed on PMI because I tried several loan options.

If they didn't have the cashflow to save 20% down, they will likely run into issues affording the PMI on the FHA loan.

Maybe. Maybe they've got a good paying job fairly quickly out of school and thus have great cashflow but not much in savings built up yet, like I did.

Not always true. I was living in a high cost area that made it very difficult to save. Buying a house in a much cheaper area meant my monthly expenses were halved.

You typically need PMI then? That's money down the drain.

You can pay off enough to not need PMI, and in many areas the house value increasing will help you.

So's renting. I took an FHA loan and paid it down to the "cancel my PMI" level as quickly as possible, and I'm fairly sure it was the right decision in my case.

can't do that on a lot of FHA loans now. It's for the lifetime of the loan.

You can probably refinance at that point, though.

Reply on news.ycombinator.com