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09-08-2009, 02:47 PM #1Registered User
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Factoring PMI into debt reduction plan
I'm trying to figure out where I should factor this part into debt repayment.
Right now we have an FHA loan and our house is appraised this year at $99,000. We currently owe around $85500... so we are paying PMI. It is about $25/month.
The mortgage is at 5% interest.
Here is where we are at:
December we will be totally out of CC Debt...
The next step after that is my student loans (which are at 4% interest)
And then our timeshare. The timeshare is the longest and will take a while.
Where should I factor in this PMI? Should I knock it out after the CC debt? Or should I wait until the end of the debt snowball?
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"It doesn't matter how hard you hit, it's how hard you can get hit and keep moving forward. That's how winning is done." - Rocky Balboa
Story of my life. In 2007 we had 78000 worth of debt, and we climbed out under it, on top of paying for a surgery with cash, bought a house, had a foundation shift and $11000 in repairs later we are good to go.. then I hear the words "I'm pregnant!"
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09-08-2009, 02:57 PM #2Rude and Vile Master
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You can't "factor in" PMI in the way I think you are.
PMI isn't a debt. It's an extra charge on your mortgage because you're over 80% loan-to-value.
In order to eliminate PMI, you must pay down your mortgage to the point where you owe less than 80% of the value of the house. After that point, you contact the mortgage company and have them get the PMI payment killed.If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.
Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"
Greebo(Nerd Spender): Loving and extremely patiently tolerated husband of ceashels.
WARNING: Y Chromosome behind the keyboard. Adjust your listening filters appropriately!
ThreeTwo mortgages,twooneno car loans,oneno credit cards, and a partridge in pear tree!
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09-08-2009, 02:59 PM #3Rude and Vile Master
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The good news is, you're only at 86% or so. By the time you pay off the timeshare, you may very well be below 80%.
Also you could look into having the house re-appraised - check the value on Zillow and if it's gone up, talk to the bank about re-appraising and whether that will allow you to discontinue PMI early. You would end up paying a few hundred for the appraisal, but that'll pay for itself if you can get rid of PMI.If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.
Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"
Greebo(Nerd Spender): Loving and extremely patiently tolerated husband of ceashels.
WARNING: Y Chromosome behind the keyboard. Adjust your listening filters appropriately!
ThreeTwo mortgages,twooneno car loans,oneno credit cards, and a partridge in pear tree!
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09-08-2009, 03:14 PM #4Registered User
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I'm not looking at it as a debt but an expense but I was factoring if I can get the money together and get rid of it that is more money that can be put toward financial peace.
--
"It doesn't matter how hard you hit, it's how hard you can get hit and keep moving forward. That's how winning is done." - Rocky Balboa
Story of my life. In 2007 we had 78000 worth of debt, and we climbed out under it, on top of paying for a surgery with cash, bought a house, had a foundation shift and $11000 in repairs later we are good to go.. then I hear the words "I'm pregnant!"
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09-08-2009, 03:16 PM #5Rude and Vile Master
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When you say the house appraised at 99k, was that for taxes?
If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.
Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"
Greebo(Nerd Spender): Loving and extremely patiently tolerated husband of ceashels.
WARNING: Y Chromosome behind the keyboard. Adjust your listening filters appropriately!
ThreeTwo mortgages,twooneno car loans,oneno credit cards, and a partridge in pear tree!
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09-08-2009, 03:36 PM #6Registered User
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appraised for the mortgage 99k.
purchased for $94900.
taxes have it appraised at $94000.
loan documents say when it gets below $80000 it is gone so I am going with the mortgage appraisal since that is the one that truly matters right now... I doubt the housing market will spike up significantly in the near future.
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09-08-2009, 03:39 PM #7Rude and Vile Master
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Ok - you're doing what I do. You're over-thinking it. It's $25 a month. $25 month is $100 every four months. It isn't enough to matter. I started thinking about how do we figure out the net return by paying down the house faster and it hit me - Greebo, you're falling into the over-think trap.
Pay off the CC debt, work the snowball.
If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.
Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"
Greebo(Nerd Spender): Loving and extremely patiently tolerated husband of ceashels.
WARNING: Y Chromosome behind the keyboard. Adjust your listening filters appropriately!
ThreeTwo mortgages,twooneno car loans,oneno credit cards, and a partridge in pear tree!
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09-08-2009, 03:50 PM #8Registered User
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I worried about it and paid down the mortage early to get rid of PMI but then found out it is below 80% AND the date they set if you reach it early they have to do an appraisal to take it off early well that 300 for the appraisal was about the same as what we would save so I forgot about it.
Our mistake was not doing WAY earlier I would have if I had known
the money went for an addition so I should have had it appraised when it was finished.Meg
cc debt free YEAH on to the mortage
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