Hey all, I've got a first time homebuyer question:
(I'm buying my first house. I'm 23, making $32,000 a year and want to get something around $90,000-110,000. My credit is good (~730), I have no debts, and I have $22,000 in my bank accounts.)
I'm looking at two financing options, and wondering if I'm missing something:
[b]Broker:[/b] Will take 3% down, will require PMI, closing costs will be $2,000-3,000, APY will be ~5.75.
[b]Bank:[/b] Requires 5% down, requires no PMI, will pay closing costs, APY ~6.125.
Assuming I'm not planning on pouring money into equity, I don't see how the bank isn't a phenomenally better option. If the PMI is $40/month, it seems like the broker would have to offer a rate that was ~7/8 of a point less just to make up the difference in monthly payments.
Is there something I'm missing here? Is the bank simply the best way to finance, or are there other factors that might make a broker a better option?