Couple Buys Condo with PrivateMI, Cheaper Option Than 80-10-10 Loan
At age 21, Joy Sims never dreamed that one day she would own the two-bedroom Maryland condominium she shared with a roommate after college. Now 28, Joy and her partner, Eren Koont, were able to buy that condo using private mortgage insurance (PrivateMI).
Joy, who works in public relations, and Eren, a product development specialist, had lived together in the rented condo for about a year when they began to think about buying a home.
“Since we decided to stay in the Washington area for awhile, we didn’t want to keep throwing away thousands of dollars a year on rent,” said Joy. “ We wanted to buy a single-family home someday, and we knew that buying a condo would ultimately help us achieve that goal.”
Once the pair began looking around, they quickly realized how expensive Washington area real estate could be. So when the owner offered to sell them the condo they were renting at less than fair market value, they jumped at the chance. For them, it was the perfect first home.
“Our condo is near lots of biking and hiking trails we use on weekends and after work,” explained Joy. “It’s also close to restaurants and the Washington Beltway, so it’s very convenient to leisure activities as well as the airport.”
As the couple explored financing, they considered various options such as 80-10-10 loans and PrivateMI. “Our lender told us about using 80-10-10 loans to buy our condo, but it was definitely cheaper to use PrivateMI,” said Eren.
Using PrivateMI wasn’t an absolute necessity for Eren and Joy, since they had enough money saved up to put a full 20 percent down on the condominium. But they felt more comfortable keeping that money in the bank for emergencies.
“We could have used our savings to get us over the 20 percent mark, but we wanted to keep a safety net of cash in case something bad happened, like a job loss or getting sick,” Joy explained. “Private mortgage insurance allowed us to buy our condo and keep our emergency fund.”
For Eren, 28, the condo is a real step up from his former place in Dallas, which was a dark apartment on the first floor of an impersonal, gated complex. Here, the couple’s condo is on the second floor of a low-rise, garden condominium community near Rock Creek Park. “The second bedroom serves as my office, and I have a nice view of green grass, trees, birds, and the park, so it’s much prettier than my old place,” he explained.
Since the couple bought their condo in June of 2004, they’ve been busy planning renovations. They are putting in more attractive, energyefficient windows, and want to paint the whole inside. They may even add a new stove and washer/dryer. “It’s nice to be able to spruce up our own space,” said Eren. “It makes us feel more like adults to own and fix up our own condo.”