Business credit v FHA for downpayment cost?

Business credit v FHA for downpayment cost?

Washington, DC · Member since 2017 · 2 posts · 0 votes
What's worse business credit minimum payments or PMI /MPI payments? Is that the same thing MPI and PMI lol? Might be a dumbass question?
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Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
9y

@Brandon Raeburn, on my calculations, unless you can get business credit at 5% interest or less (yeah, right!), it WILL cost you more per month than just paying the extra 0.85% PMI/MPI per year on the whole loan balance.

Using an example purchase price of $100,000, my thumbnail calculation went like this:-  

Borrowing the extra 16.5% deposit at 5% interest = extra payments of $825 per year. 

Or, paying the extra 0.85% PMI/MPI on $96,500 loan = extra payments of $820.25 per year.

So, when you factor in your ACTUAL business credit interest rate... (I needn't finish that sentence, right?)

Of course, your BIGGEST savings will be if: you only buy BARGAINS! Welcome to BP. All the best...

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  • Investor · Towson, MD · Member since 2014 · 472 posts · 257 votes
    9y
    Can you restate the question? I'm not clear what you're asking.
  • Brooklyn, NY · Member since 2017 · 63 posts · 30 votes
    9y

    PMI is private mortgage insurance, which is a way lenders get a guarantee that you pay back the mortgage. You need it when your down payment is less than 20℅ of a conventional loan.

    Minimum payments interest; I believe you're referring to making the minimum payment on your credit cards. Which may add a higher interest percentage but you'll need to reword the question so we can better help you.

  • Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
    9y

    @Brandon Raeburn, on my calculations, unless you can get business credit at 5% interest or less (yeah, right!), it WILL cost you more per month than just paying the extra 0.85% PMI/MPI per year on the whole loan balance.

    Using an example purchase price of $100,000, my thumbnail calculation went like this:-  

    Borrowing the extra 16.5% deposit at 5% interest = extra payments of $825 per year. 

    Or, paying the extra 0.85% PMI/MPI on $96,500 loan = extra payments of $820.25 per year.

    So, when you factor in your ACTUAL business credit interest rate... (I needn't finish that sentence, right?)

    Of course, your BIGGEST savings will be if: you only buy BARGAINS! Welcome to BP. All the best...

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