Profile picture for nicoleosowski

Which of the following is better?

1) Put 20% down to avoid PMI and then after the home purchase take out a home equity loan to buy furniture?
OR
2) Put 10% down and get a single mortgage with PMI?
OR
b) Put 10% down and get two mortgages one for 80% and one for 10%? 
  • April 12 2009 - West Raleigh
  • 0Yes

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Answers (5)

As Clay pointed out, there is considerable rate risk with HELOC's.  The HELOC option would cost less initially - so if you're in a position to pay off the HELOC before rates jump that would be my recomendation, if you need longer to pay it off then i'd probably encourage you to consider the 90% 1st with MI.

Maybe you're a FTHB (or eligible move-up buyer) and could use your tax credit? 

Although the rates for mortgages are super low, it's generally not such a good idea to finance personal property on a long term home loan since the low rate over a long term costs a LOT.  Try Ricardo's advice and check-out Craigslist.
  • March 07 2010
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Ricardo,

I gave you a thumbs up for your response. But, it seems odd you would say that when your Screen Name is "Raleigh Zero Down." I didn't know that Sun Trust had Zero Down Products. .... Happy funding, Rudi
  • March 07 2010
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None of the above.

Put 20 % down and save money to pay cash for good quality USED furniture.
  • March 07 2010
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Profile picture for natewolf

Home equity lines are hard to find.


If you are a first time homebuyer, in North Carolina there is down payment assistance for qualified buyers. This allows up to $8000 toward your downpayment in a Zero-percent interest second mortgage. You will also potentially qualify for the $8000 Tax Credit.


Then you can use your own money, along with the $8000 Tax Credit to purchase furniture.


But expecting to get an equity line these days on a just purchased property? Nearly impossible.

  • April 13 2009
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I like the 80/10/10 option but Home Equity Lines are based on the Prime Rate and I would not be surprised if the Prime rate is back up to 8% or more in 18 months. Take the 90% loan with MI, door 2. 
  • April 12 2009
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