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July 28, 2008
House musing
We bought our home for $195,000 with a 10 percent down payment in May 2007, a townhouse in a row of 12 identical units. A few weeks later a unit on the other end of the row sold for $239,900; its owner had passed away and his son sold the house. Six months later another neighbor retired and sold her place for $224,200. This morning my next door neighbor, who recently became disabled and can no longer live with all these stairs, signed hers away for $224,000. I feel pretty good about my situation. I feel like Ben and I should formally initiate the "you'd better remove my PMI" proceedings with our lender.
PMI, or private mortgage insurance, is required by mortgage companies when a home owner puts down less than 20 percent of the cost of the house. Mortgage brokers repeatedly and vehemently told us that we were foolish to sign a single 6 percent 30 year fixed rate loan and pay PMI, when we could have one 6 percent/30 year loan for 80 percent of the house's value, and get a 30 year 8.5 percent ARM for another 10 percent. We'd be throwing money away on PMI, they'd say, seemingly oblivious to the amount of money we'd throw away on interest over the course of 30 years.
We're about to show them a thing or two.
I just hope the fact that the crazy pack rat neighbor sold his totally trashed place for $130,000 in February doesn't mess every thing up. The guy who bought that place spent months gutting it and rebuilding the interior from the ground up, the damage was so bad. Do appraisers take that kind of thing into account?
Posted by Courtney_Sherwood at July 28, 2008 07:37 PM
Comments
I want a cat anecdote.
Posted by: Rian at July 28, 2008 11:01 PM
Hey. I liked this one. Concerned parents want to know that their kids' financial decisions are paying off.
But I do keep wondering about a cat and was it a shower curtain?
Posted by: Sue at July 29, 2008 09:37 AM
Hee hee. I'll get to the cat eventually. Writing about the shower incident will require a little more mental energy than I can spare, at least until I get this week's database homework done.
Posted by: Courtney at July 29, 2008 12:04 PM