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happytobreathe
The Lazy Days of Summer
Member since 10/06 1413 total posts
Name:
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FHA Mortgage - And Our Offer
We put in an offer on a short sale. The broker said we would be better with an FHA loan because of the amount we have up front. He also mentioned something about MPMI or something I cannot remember now. Any thoughts?
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Posted 8/21/08 8:58 PM  |
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siffleuse319
LIF Infant
Member since 8/08 189 total posts
Name:
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Re: FHA Mortgage - And Our Offer
MI and PMI: Mortgage Insurance, which you pay 1.5% or so up front at closing (or add it into your loan) and then you pay PMI (Private Mortgage Insurance), which is based on your LTV ratio(loan to home value). PMI for FHA loans can end at the 5 year mark IF your LTV is 78% or less (meaning, you would have needed to pay 22% of your total loan off or the market price would have needed to increase your equity). Basically...for FHA you pay both MI and PMI and for other loans, usually referred to as 'conventional', if you put less than 20% down, you pay PMI. In the end, the amounts are very similar, they're just broken out differently. I hope this makes sense?!?!?!?!
PS: Unless you have at least 20% to put down...you will probably need to go with FHA, which is a government-backed loan. They allow for lesser down payments than conventional.
Message edited 8/21/2008 9:06:00 PM.
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| Posted 8/21/08 9:04 PM |
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EJCLJ01
LIF Infant
Member since 8/08 213 total posts
Name:
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Re: FHA Mortgage - And Our Offer
Hi, originally when my wife and I were mortgage hunting, everyone kept pushing FHA all the time.
The minute we walked in thats all they pushed, they didn't even look at other options with us. Since we didn't have 20% to put down, they just wrote us off to an FHA.
Finally we went found a broker through recommendations and he seemed to know lots about all types. VA, FHA and Conventional.
Anyway, long story short we are in contract with a house. I gave the mortgage broker our budget and we will have 10% down and wind up in a conventional loan. Which in the begining everyone told us we cant. The plus side is alittle better intrest rates in conventional, we will lose the PMI faster since we put 10% down. The closing costs have been put into our mortgage as a sellers consession so our 10% is all towards the principle.
Other plus side of conventional is that you won't have additional inspections or holdups from the bank. As I understood FHA and especially VA will inspect the property and will not give a mortgage if they find any issues whereas a conventional wont.
Anyway what I am basically saying is, don't be so quick to follow what the mortgage brokers are pushing. Everyone told us we couldn't do conventional and now we are.
send me an FM if you want a contact for him.
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| Posted 8/21/08 10:40 PM |
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BaroqueMama
Chase is one!
Member since 5/05 27530 total posts
Name:
me
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Re: FHA Mortgage - And Our Offer
We have an FHA loan because we didn't have a 20% down payment and it worked fine for us. Yes we're paying PMI, but it will almost definitely be wiped out at the 5 year mark. We had no issues with additional inspections, etc. Infact, I found the process to be rather easy.
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| Posted 8/21/08 10:45 PM |
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Katie111806
Team Pink!
Member since 12/06 5349 total posts
Name:
Katie
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Re: FHA Mortgage - And Our Offer
Posted by prncss
We have an FHA loan because we didn't have a 20% down payment and it worked fine for us. Yes we're paying PMI, but it will almost definitely be wiped out at the 5 year mark. We had no issues with additional inspections, etc. Infact, I found the process to be rather easy.
Same here-and we got a waaaay better rate than had we gone conventional. Def do your research but it was def worth it for us.
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| Posted 8/21/08 11:38 PM |
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VickiC
Rocking the party
Member since 5/05 4937 total posts
Name:
Vicki
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Re: FHA Mortgage - And Our Offer
We have a regular conventional mortgage and we also put 10% down. We did the other 10% through a Home Equity LOC to avoid PMI.
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| Posted 8/21/08 11:39 PM |
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Aries14
Can't plan life...
Member since 8/08 2860 total posts
Name:
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Re: FHA Mortgage - And Our Offer
I just brought my house last month with an FHA loan and it was TERRIBLE! Although we didn't have a choice bc we had a low down payment. There were MANY inspections and they found every little thing and would not give us the loan if it wasn't fixed. Two days before we closed we got a call that a FHA inspector did yet another inspection and didn't like the peeling paint on the back deck and parts of the house. Needless to say, we were painting the house at 6 am two days in a row and had to have the inspector come back to reinspect it the morning of the closing! It was a pain in the neck, but hey - we have a house!
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| Posted 8/22/08 10:07 AM |
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happytobreathe
The Lazy Days of Summer
Member since 10/06 1413 total posts
Name:
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Re: FHA Mortgage - And Our Offer
Wow thank you for the wealth of knowledge! I am undecided as to the true negatives to the FHA because we have such a low down payment...so FHA might be the way to go!
Thank you to all. It is a short sale...so who knows if we will get it or if they will actually have inspections.
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| Posted 8/22/08 11:07 AM |
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EJCLJ01
LIF Infant
Member since 8/08 213 total posts
Name:
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Re: FHA Mortgage - And Our Offer
We are putting down about 10% but have also been shown a conventional with only 5%. Monthly payments still worked out better than FHA.
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| Posted 8/22/08 11:24 AM |
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