Home Buying in Haymarket>Question Details

Unspecified, Both Buyer and Seller in Chantilly, VA

Do we pay PMI or rent until we can save enough to avoid it?

Asked by Unspecified, Chantilly, VA Mon Mar 25, 2013

Our rent is up this August and we absolutley need to move out as we have outgrown our space. We will only be able to put down about $20k at this time. However I will be returning to full-time work and we will plan to put as much as my income in the home as possible to avoid paying a ton in PMI. If we buy this June, we plan to reach 20% in two years.

Should we find a new rental for the next two years until we save 20% for a down payment or do we buy now and put as much into the mortgage as we can so we can reach 20% within two years.

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Home prices are rising in value so it may take longer to save the 20% in long run and you'll pay more for home if you continue to wait. I agree with the other agents who have answered that it is better to get in and buy now. There are great loan programs out there right now where PMI can be avoided. A reputable loan officer can assist you in determining the best loan program for you that makes the most sense and fits into your budget. Feel free to call me at 703-608-6342 for several names and contact information of ethical lenders I know and trust. I have been working with these lenders for 6-8 years. They know this business and are excellent at consulting with buyers to find the right loan program for you.
1 vote Thank Flag Link Mon Mar 25, 2013
Let's talk. There are many, many variables which determine whether you will pay PMI or not, i.e., credit score, location of property, etc. I'm going to closing this week with a client who is buying in Warrenton, VA, and she is getting a 100% loan. When deciding which loan to get you may need to speak with more than one loan officer because there are many different loan programs. One lender may have a loan program that will work for you while another one may not have that same program.

You are welcome to call me on my mobile phone at 703-472-4824. I'm a full time real estate agent who has lived in the Gainesville/Haymarket/Catharpin area for more than 30 years. It would be my pleasure to show you any properties in this area or Ashburn so you can compare the communities and decide for yourself. My clients live in each of the neighborhoods in Northern Prince William County and the Ashburn area and none are dissatisfied.

Carol Czarkowski
Prosperity Realty LLC
14088 Sullyfield Circle Suite N
Chantilly, VA 20151
0 votes Thank Flag Link Sun Jan 19, 2014
Hello There:

Let's consider this ~ renting is like paying someone else's mortgage and basically when the market gets improved only and only the owner get the whole benefit out of it with increased value. I come across this PMI concern with a lot of buyers these days, with PMI rates back to normal (they have been decreased for sometime) that sure is a concern, but we should be looking at a bigger picture here!! Home prices are still great and the good thing is that they are on a steady incline so you would surely make a good investment if you buy now with or without PMI and interest rates are great as well.
There are some options available to avoid PMI but when you consult a lender ask for different options and also get the fully stated estimates so you can compare programs side by side - I usually sit with my clients and look at estimated statements together so I can point out the differences and explain them.
Home buying is such a great experience and when the market is right ~ why not go for it??
Hope this information is helpful to you and let me know if you'd like to sit with me to understand the process and look at different options.

Happy Buying ~

Best Regards,
Faiza Alvi - Realtor®
Prince William Realty, Inc.
703-389-7973 (Direct)
703-580-9995 (Fax)

I believe:
Real Estate is about building relationships
& serving clients with honesty, integrity & passion.
0 votes Thank Flag Link Mon Mar 25, 2013
I would pay the PMI, even though it's expensive.

Here's my thinking. First off, it's quite a chore to save such a big pile of money. Once you've done that, you may not want to throw it all into a house when you can keep it safe in the bank.

Secondly, borrowing is cheap today, and may not be cheap tomorrow. The Fed is intentionally forcing interest rates down below market values, and that may not continue in two years.

Now, a lot of people will tell you that if interest rates go up, prices will come down, and while that makes perfect sense, it's really really really difficult to see a time over the past 70 years when prices went down because interest rates went up.

Finally - I think we learned from the recent crash that the people who had put their own money into the deal lost it (for a while, at least), and the people who put a minimum down lost the least. From a societal standpoint, of course, it's better if we all put our own money into the deal. From a personal standpoint - if the economy were to falter, would you rather lose the bank's money or your own money?

All the best,
0 votes Thank Flag Link Mon Mar 25, 2013
For the majority of Americans the cost of a home includes mortgage interest, PMI, home owners insurance & property taxes. When you rent, you are still paying these costs...you are paying them for someone else, but are receiving none of the tax benefits of home ownership.

It is best to find a home that you can comfortably afford without needing to have the PMI removed, which with new FHA rules, will no longer occur. Effective April, an FHA loan with PMI will keep PMI for the life of the loan. If you want to look at ways to save, consider a community without an HOA or buying a lower priced home
0 votes Thank Flag Link Mon Mar 25, 2013
There are many types of loan programs out there. You should really talk to a lender and ask about programs that fit your needs.

I'm currently working with a couple of great clients who just qualified for a no PMI program. One is a No PMI 100% loan and another is a no PMI with only 3.5% down.

If you're interested, I'd love to talk to you more about them and introduce you to these lenders. No obligation for anything else moving forward unless you wanted to.

Hope to hear from you!

0 votes Thank Flag Link Mon Mar 25, 2013
The amount of house you can buy now is a certainty. In waiting to get to a 20% down payment, who knows where interest rates will be. If they go up, your buying power decreases. And home princes are increasing in the Western PW County market.

If you are on a conventional loan with PMI, you can always refi when you do have enough to get out of it. That's what I would recommend. Waiting to avoid PMI could cost you more in the long run as interest rates will start to go up.
0 votes Thank Flag Link Mon Mar 25, 2013
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