Mortgage calculators
  • Avis Mortgage, Inc
    256 Papalaua
    Lahaina, HI 96761

    Tel: 800-711-AVIS (2847)
    Fax: 800-397-2345
    Email: dean@deanrathbun.com
  • What is Better: take a Second Loan or Pay PMI?

    Input Information
    Property Information
    Home Value : ($)
    Additional Information
    Annual PMI :
    Down Payment :
      Standard 80% Loan Second Loan
    Interest Rate : (%) (%) (%)
    Length : Yrs Yrs Yrs
    Points : (%) (%) (%)
    Closing Costs : ($) ($) ($)
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    Financial Analysis (Switch to Plain English)
      Standard 80% Loan Second
    Points Value : $2,700.00 $3,600.00 $300.00
    Closing Costs : $1,200.00 $700.00 $1,000.00
    Total Closing Costs : $3,900.00 $5,600.00
    Down Payment : $30,000.00
    Upfront Cost : $33,900.00 $35,600.00
    Amount Financed : $270,000.00 $240,000.00 $30,000.00
    Monthly PI : $1,449.42 $1,216.04 $253.16
    Months With PMI : 78 0 0
    Monthly PMI : $112.50 $0.00 $0.00
    Monthly Payment : $1,561.92 $1,469.20
    Total Interests Paid : $251,790.62 $213,344.38
    Total PMI : $8,775.00 $0.00 $0.00
    Total Payments : $530,559.60 $483,338.57
    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 $300,000.00 and you are prepared to put down $30,000.00 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 $33,900.00 up front for closing and would have a monthly payment of $1,561.92. In the end, you will have paid $530,559.60 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 $35,600.00.

    Your monthly payments, however, will be slightly LESS at $1,469.20.

    And, in the end, you will have paid only $483,338.57 – that’s a total SAVINGS of $47,221.03!

    DISCLAIMER: There is NO WARRANTY, expressed or implied, for the accuracy of this information or it's applicability to your financial situation. Please consult your own financial advisor.