What is Better: take a Second Loan or Pay PMI?
Input Information
  
Property Information
Home Value :
($)
Additional Information
Annual PMI :
Down Payment :
  Standard 80% Loan Second Loan
Interest Rate :
(%) (%) (%)
Length :
Yrs Yrs Yrs
Points :
(%) (%) (%)
Closing Costs :
($) ($) ($)
 
PDF options are customizable. You may leave either "Let me print..." or "Send calculation results..." option on the screen.
 Let Me Print That Form in PDF!
 
 
 
Financial Analysis (Switch to Plain English)
  Standard 80% Loan Second
Points Value : $450.00 $600.00 $50.00
Closing Costs : $1,200.00 $700.00 $1,000.00
Total Closing Costs : $1,650.00 $2,350.00
Down Payment : $5,000.00
Upfront Cost : $6,650.00 $7,350.00
Amount Financed : $45,000.00 $40,000.00 $5,000.00
Monthly PI : $241.57 $202.67 $42.19
Monthly Payment : $241.57 $244.87
Total Interests Paid : $41,965.10 $35,557.40
Total PMI : $0.00 $0.00 $0.00
Total Payments : $86,964.10 $80,556.43
Plain English Help (Switch to Financial Analysis)

When you take out your home mortgage loan, you might want to consider taking out an 80/15 loan in order to avoid PMI. By going this route, you could potentially save a great deal of money, though your upfront costs may be a bit more.

Pretend the home you are interested in purchasing has a value of $50,000.00 and you are prepared to put down $5,000.00 as a down payment. With a standard 30 year loan with an interest rate of 5.000% and 1.000 point(s), you will have to pay $6,650.00 up front for closing and would have a monthly payment of $241.57. In the end, you will have paid $86,964.10 toward your home.

If you opt for an 80/15 loan, you can avoid making PMI payments altogether. Because it involves taking out two loans, however, you will have to pay a bit more in upfront costs. In this scenario, that amounts to $7,350.00.

Your monthly payments, will be slightly HIGHER at $244.87.

And, in the end, you will have paid only $80,556.43 – that’s a total SAVINGS of $6,407.67!