Hi Reddit,
My current 4% 30 year mortgage balance is ~$135k which has a monthly PMI payment of ~$70. The lender says I need to get my mortgage balance down to ~$120k to remove the PMI. Monthly payment is $1310 (230 principal; 450 interest; 630 escrow for taxes and insurance). This leaves about 5.5 years of paying PMI or about $4,560 in total PMI payments.
I have the $15k required to get my balance down to $120k today. But, I've set aside that money as a down payment on my next house (purchase in about ~3-5yrs). Based on some online mortgage calculators, I'd save an estimated $200/mo on my next mortgage payment if I have that additional $15k as part of a down payment. Excel Present Value calculator tells me that a savings of $200/mo at 4% over 360 mo is $5,000 today.
So, am I saving more money my nuking the PMI today and removing 5.5 years of PMI? Or am I saving more money by having that $15k as additional down payment on my next house (which will theoretically save me principal and interest on the next mortgage)? Based on my math above, it pays to save but what am I missing?
Let me know if you need more information to solve.
Submitted August 01, 2018 at 10:26PM by pfthrowaway25328 https://ift.tt/2v8e5lq
