3,828 a year (plus 6k rolled into loan) v. paying 16.5% of 250k (20-3.5%) upfront (about 40,000.) So it takes me over 10 years to get my down payment back, just based on the cheaper payments for conventional financing. that’s a long time. I cannot buy earthquake insurance for 3,828. it just seems like it should take less than a decade to get the money back (which makes me think FHA money is way too cheap). plus, doesn’t the premium get cancelled when my equity theoretically reaches around 20%? to me?

the 6,000 rolled into the loan is just pretend money. it’s the 20% down that hurts to relinquish. from the point of view of someone who will walk if things continue to decay, who cares if 6k is added to the loan balance? it’s the same to walk away from 250 as 256. plus, the 3828 is tax deductible right? so it’s not really 3828 a year extra to pay to get to walk away. What am I missing? don’t most people leave by a decade anyway? how is conventional financing even competitive with FHA under current circumstances? Only for people who know for certain they will be in the house multi-decades?

from another perspective, that’s 40,000 earning 3,828. i guess that’s about 10%.from that perspective it looks good. however, I lose the tax savings i would ahve gotten had i paid 3828. so is it really earning about 2500 a year? if so, the 6% looks less enticing. id rather roll the dice on gold.