Well said! I'm with you. I personally refuse to pay PMI and have been lucky enough to afford 20% down on all my properties. Unfortunately, many people struggle to come up with 3.5% and thus use this loan for that benefit.
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When I bought my home my lender-bank insisted to take FHA loan and after checking all numbers we refused a sale.
I decided it just doesn't have any sense to pay 1% PMI inside closing cost for noting because I'd rather add this 1% to my down payment ,find additional 0.5% to make 5% down and take conventional loan instead of FHA.
Also I compared monthly PMI payments for both for the same property - $315 for FHA and $157 for conventional. for me it was just nonsense to take FHA loan.
we were lucky. Market went up and instead of waiting required 2 year for removing PMI, I refinance our home after 1 year without PMI
I remember, but might be I'm wrong FHA also has some time period when you cannot refinance it. Something 3 or 5 years.
You definitely made the right move. Yeah FHA makes you pay PMI for minimum of 5 years, regardless of the equity you have in the home. It's kind of crazy.