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So, I am looking at using an FHA loan to finance a home.
I got a few FHA quotes today and they are telling me the upfront mortgage insurance premiums are 1.75 percent. But after reading this and how it all changed it should be 1.25 percent.
My LTV would be 96.5 percent and my fico is 780. What am I missing here? I understand it is financed back into the mortgage. But it would be nice to get some accurate numbers.
80/20 question
Are they still doing this? To skirt around PMI?
Honestly, today I was all lined up to use USAA financing on a short sale. Today the short sale was approved. Then a few hours later I get a phone call from USAA. Your home is in a declining market. You have to put 10 percent down. I only can do 5 percent down.
I really didn't want to get creative with fiancing but I guess it is coming down to that. Nothing like having your fiancing rug pulled out the day the contract is accepted. Thanks USAA.
Wankel7, with your credit score do not do an FHA loan, go with a conventional financing, but you must put down 5%. Also, have your loan officer structure your purchase with a 80% first and a 15% second. Structuring your loan this way will give you the best overall mortgage.
You also asked about the upfront FHA fee, well due to the Housing and Economic Recovery Act, the up front mortgage insurance fee as of Oct 1 is 1.75%.
The declining market is an issue, so i would advise you to contact a mortgage broker who can shop you with 100's of lenders who each will have different guidelines. One drawback of working directly with a lender is that they will only tell you what they can do. A mortgage broker can tell you what hundreds of lenders will do and the broker will more then likely get you a better rate.
I have to slightly disagree with VictorBurek. A piggyback mortgage is not always the best option. It almost guarantees you to have to refi later on. If you gt a good fixed loan now, you will be set. I say you need to get an FHA approval and run with it. You can put the 3.5% down and be done.
The 1.75% UFPMI is correct as of Oct 1. Good luck in your endeavors.
I am working with a broker who is telling me my best option is a conventional mortgage but to buy out the PMI (approximately 4K) upfront to avoid paying it monthly. This had sounded fine to me until he said what they would do is bring my rate up and then buy it down, and that it is called "LPMI" or Lender Paid Mortgage Insurance. Is that correct or is that sketchy?
This is with 10% down on a 300K mortgage, Fico 790. I have a rate lock at 5.5% that expires soon.
Especially, if you're not paying much in lender fees
Quote:
Originally Posted by Smokipenelope
I thought 80/20's could not be done anymore?
I am working with a broker who is telling me my best option is a conventional mortgage but to buy out the PMI (approximately 4K) upfront to avoid paying it monthly. This had sounded fine to me until he said what they would do is bring my rate up and then buy it down, and that it is called "LPMI" or Lender Paid Mortgage Insurance. Is that correct or is that sketchy?
This is with 10% down on a 300K mortgage, Fico 790. I have a rate lock at 5.5% that expires soon.
I googled "fha october 1sth" and the answers started turning up. Not really official but all the websites were saying the same thing. Looks like the 1.75% will last for one year.
I had no idea about the upfront cost of the FHA. I know the ammount is financed into the mortgage. I just hate it because I have great credit, stable job history, and money to put it down. It sort of makes me sick that I will have to pay for that 1.75% for the next 30 years.
1.75% is an upfront fee which can be rolled into the mortgage or paid out of pocket.
Quote:
Originally Posted by wankel7
I googled "fha october 1sth" and the answers started turning up. Not really official but all the websites were saying the same thing. Looks like the 1.75% will last for one year.
I had no idea about the upfront cost of the FHA. I know the ammount is financed into the mortgage. I just hate it because I have great credit, stable job history, and money to put it down. It sort of makes me sick that I will have to pay for that 1.75% for the next 30 years.
They are charging 1% as an origination fee - it kinda bugs me as the previous brokers I've quoted with have been 1/2%, but they were not willing to provide as low of a rate.
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