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I'm closing on a house 4/30 and currently have two 'Good Faith Estimates' from two different brokers.
Option A: FHA 3.5% down
Monthly Payment = 1,308
Interest Rate = 5.00% (no points)
Due at closing = 6150
Option B: LTV 3.5% down (I think it's still an FHA the more I read about LTV)
Monthly Payment = 1,250
Interest Rate = 4.5% (no points)
Due at closing = 6550
at the bottom of B there's a comment "97.75 LTV to keep down payment lower!"
What's that mean? B seems like a better deal on paper, but I hesitate cause those questions like 'too good to be true' come to mind.
Any help is appreciated. Thanks.
Last edited by MysteryMT; 03-22-2009 at 07:18 PM..
Location: central, between Pepe's Tacos and Roberto's
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LTV stands for loan to value, which is expressed as a percent. Both are FHA loans as it is the only loan program that I am aware of that will go to 96.5% loan to value, which is obviously what it would be with 3.5% down.
4.5% with no points is to good to be true currently, and FHA does not allow 97.75% LTV on purchases anymore.
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