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Confused about PMI - is it worth putting 20% down?

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Kam_S
Joined:
19.12.2021
Posts: 1148
Topic Starter
13.02.2025 02:08
I am currently looking at my first home purchase and my lender keeps mentioning Private Mortgage Insurance (PMI) since I don't have enough saved for a full 20% down payment. I've heard mixed things about whether it's a total waste of money or just a necessary evil to get into the market sooner. Does anyone have experience with getting PMI removed later, or are there better ways to structure a loan to avoid it entirely? I'd love to hear how others handled this during their buying process.
20 replies in this topic
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Denis_P
Joined:
03.05.2022
Posts: 2397
25.02.2025 07:13
It really depends on how long you plan to stay in the house. If you're moving in 5 years, paying PMI might be cheaper than waiting to save up the full 20%.
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MrNobody
Joined:
20.03.2020
Posts: 2204
11.03.2025 13:19
In reply to a previous post
I was in your shoes three years ago. I opted for PMI, and honestly, it hasn't been that bad. It was worth it just to stop paying my landlord's mortgage.
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monica_p
Joined:
08.02.2023
Posts: 114
22.03.2025 15:33
In reply to a previous post
Look into a 'piggyback loan' or 80/10/10 loan. It’s a way to avoid PMI by taking out a second mortgage for the remaining 10%, though the interest rates on the second one are usually higher.
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Sam_W
Joined:
04.09.2023
Posts: 2470
02.04.2025 15:14
In reply to a previous post
PMI isn't the end of the world, but check if your lender offers 'lender-paid PMI' where they cover it in exchange for a slightly higher interest rate. Sometimes that's better if you plan to refinance later.
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Oli_S
Joined:
31.10.2021
Posts: 154
03.04.2025 23:06
In reply to a previous post
My advice? Don't drain your entire savings just to hit 20%. You need a solid emergency fund for all the unexpected repairs that pop up the moment you get the keys.
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jacek_pl
Joined:
04.11.2020
Posts: 1084
16.04.2025 03:29
Is it worth it? Only if you think property values are going to keep climbing rapidly. If you wait, you might end up paying more for the house than the PMI would have cost you.
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Nico_N
Joined:
12.02.2021
Posts: 1789
23.04.2025 12:28
In reply to a previous post
I agree with the person above. Waiting to save 20% in a hot market is a trap because house prices often rise faster than your savings account grows.
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demian_l
Joined:
03.07.2022
Posts: 1340
28.05.2025 15:29
In reply to a previous post
You can get PMI removed once your loan-to-value ratio hits 80%, but make sure you understand the appraisal process. Some lenders make it a huge pain to actually get it dropped.
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Alan_K
Joined:
20.08.2023
Posts: 1174
09.07.2025 09:55
I’m currently paying PMI and it’s about $80 a month. Honestly, it’s a small price to pay for having my own backyard.
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WhiteCrow
Joined:
12.02.2025
Posts: 2292
10.07.2025 04:35
In reply to a previous post
Definitely check if you qualify for any first-time homebuyer programs in your state. Some offer down payment assistance that helps bridge that gap without adding PMI.
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Expert_11
Joined:
02.09.2021
Posts: 2404
25.07.2025 13:14
I hate PMI, but I hate throwing money at rent even more. You have to pick your poison.
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Brian_Z
Joined:
26.03.2024
Posts: 1008
04.08.2025 14:38
In reply to a previous post
Just make sure you calculate the 'break-even' point. If you put 5% down, calculate how many years of PMI you'll pay versus how much you save by investing that extra 15% elsewhere.
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Nadia_D
Joined:
22.04.2024
Posts: 2090
12.08.2025 16:37
Whatever you do, don't let a lender pressure you into a loan type you don't understand just to 'avoid' PMI. High interest rates are much worse than a small PMI fee.
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Polly_H
Joined:
13.05.2022
Posts: 1850
26.08.2025 09:14
In reply to a previous post
I had my PMI removed after two years because the market exploded and my home value went way up. I just had to pay for a new appraisal.
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Hannah_B
Joined:
11.01.2025
Posts: 286
18.11.2025 04:40
It's not a waste of money if it gets you into the market. Time in the market > timing the market.
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Leon_M
Joined:
12.08.2023
Posts: 2351
14.12.2025 18:46
Does anyone know if FHA loans are still the go-to for low down payments? I heard the mortgage insurance there stays for the life of the loan.
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demian_l
Joined:
10.12.2022
Posts: 2481
28.01.2026 13:18
In reply to a previous post
Yes, for FHA loans, the mortgage insurance is usually for the life of the loan unless you put 10% down. Conventional loans are much better if you can qualify.
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GoldenHands
Joined:
27.03.2022
Posts: 1869
13.02.2026 19:39
I’m waiting until I have 20%. I’d rather have the extra monthly cash flow for renovations than give it to an insurance company.
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Alan_K
Joined:
13.02.2022
Posts: 2384
28.02.2026 07:12
Good luck with the search! It's a stressful process but worth it once you're moved in.
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seba_eu
Joined:
03.01.2024
Posts: 2083
16.03.2026 08:12
In reply to a previous post
I’d suggest talking to a local credit union. They often have more flexible loan structures than the big national banks and might help you avoid PMI.

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