Buying First Property

[Ezio Sanchez]

Purchasing my first property. FHA financing, moving in.

Assuming the market does not go up or down, in the next 3 years I plan on being really aggressive with the principal and refinancing to get rid of the MI.

At that point, the mortgage payment will go down and could either have a cheaper mortgage for my primary or move to a bigger and at that point this property will generate some cash flow.

I believe whatever I end up doing 3 years from now or so, I will be fine.

To me this sounds like a good plan, any flaws that I may be missing here?

Thanks!

[John Warren]

@Ezio Sanchez I would not personally look to pay down the principle to get rid of PMI. I tried that many years ago when I bought my first home, and it was a discouraging process. Keep in mind that your rate of return on your money in this scenario is very, very low. If you wait for a few years, most likely you will find a way to refinance out of your FHA mortgage. I personally was able to do a cash out refinance because my primary home in Riverside had appreciated enough. I got cash out of the home AND eliminated PMI!