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UltravioletClearance t1_j9fwewt wrote

Reply to comment by pccb123 in As of Aug 2022, the median millennial household income was $106,661. People making at or close to the median household income that are buying houses in MA, where are you able to buy? by BoOo0oo0o

Putting down a huge down payment (like close to 50 percent) is the only way buying a $600k+ home on $110k household income makes any mathematical sense. A lot of people who do this tap into family weath or an inheritance for the down payment.

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occasionally_ganache t1_j9fxm8i wrote

Not quite, even with 10-20% down if you’re willing to have roommates then it works out strongly in your favor versus continuing to rent.

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Ready-Interview-9809 t1_j9gi79v wrote

Whatever percentage you need to avoid PMI is gonna make the difference. Look it up.

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rakdoc t1_j9guwku wrote

I pay 66/ month for PMI. it’s boring if you have heat great and solid income. it’s 1/50 of my mortgage

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WinsingtonIII t1_j9hftbv wrote

PMI is not nearly as big of a deal as people make it out to be. Mine is like $70 per month, I pay more for my cable/internet bill. That's hardly a big deal when you consider what your mortgage will be in most parts of MA anyways.

I don't think there are many situations in a high housing cost state like MA where someone could otherwise afford the mortgage on a house but can't because of the PMI amount.

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Ready-Interview-9809 t1_j9hjaoi wrote

I was replying to the “10-20% down” comment. Noting that if someone had the option to put 10-20% down, whatever percentage to avoid PMI would save ( for you $70x12=$840/yr ) and be the better option.

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WinsingtonIII t1_j9hpvle wrote

Sure, that said I do think in such a crazy housing market you have to consider the opportunity cost of delaying your home purchase to save up the necessary down payment to hit 20%. But yes, if you can already afford 20% then there's no reason not to just put down the 20%.

We bought three years ago and put down around 10%. If we had waited to save up for 20%, we'd still be saving and wouldn't be able to buy yet. Meanwhile, the value of our house has increased by $100,000 in that same timeframe and the interest rates have skyrocketed. We simply wouldn't be able to buy this house today, whereas we could three years ago.

Paying $840 per year for ~6 years to be locked into a sub 3% interest rate mortgage on a house that cost $100,000 less than it would today is absolutely worth it. The difference in list price and interest rates if we bought today would easily exceed the $70 per month we are paying in PMI.

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occasionally_ganache t1_j9gjrev wrote

20% is the amount to avoid pmi, I know because I literally pay pmi

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Cupcake-Mountain t1_j9iyd0s wrote

There are loans where you only need 3% to avoid pmi. I know because I only put down 3% and don’t have pmi.

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