March 3rd, 2012

planet

house finances & my pmi bummer

Last year I got a letter from the county that my house was worth like $5K more than what I paid for it, which made my taxes go up a little but I was still excited because it meant I was closer to owning that 20% of my house needed to stop paying mortgage insurance. I pay like $50 or $60 a month in PMI because I bought a house right after the financial crisis, when the world realized that you shouldn't let people take out multiple mortgages so it didn't look like they had a mortgage that was over 80% of their house value.

In other words, if you buy a $100,000 house and only have $19,000 to put down, you need an $81,000 mortgage which is 81% of the house value which is too much for them to really "trust" you. In 2005, you would have taken out a $50,000 mortgage and a $31,000 mortgage... both below $81,000, you win! But those days are gone. Maybe for the best, anyway, it all felt sort of fake.

Oh but back to my situation... let's say your house value goes up to $105,000. Now the $81,000 mortgage is 77% of the house value. You magically owe less than 80%!

I was darn close to the 80% with the higher house value, like, I could have been out of it nowish. But since it's back down, it'll take me a year or so. And I know I can pay for an appraisal and it MIGHT be higher than the counties, but I've read that's like $300 or so and doesn't guarantee anything, it might be even lower!

Honestly I feel sorta bad about not having the 20% to put down in the first place. My first few years out of college I was really good at saving money. But then I met more friends, had more fun, Marc and I lived downtown and had a LOT of fun, there were trips, etc etc.

(Then again why feel bad about that? Can't take it with you...)

Getting down with PMI will be a lovely victory. And it will not happen this month. Oh well.