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Yes, one of the catches of a FHA loan is that you have to pay PMI for the first 5 years of the loan.
Thanks! I couldn't remember for certain, but was pretty sure.
There is a way to get out from under that PMI within the first year or so, but I can't recall.
When I was doing Closings, I always felt a little sorry for these folks, as they were not getting the best financial deal. That and doing the Closings was always a PITA!! The most work and the lowest fee...
It is interesting that the government is guaranteeing the mortgage, yet the lender still requires the expense of PMI!!
Probably, because the PMI insurer pays of more quickly (or more) than the FHA.
My intial PMI was $180 a month on a $300k mortgage at 5%. It's now $120 on a $270k loan at 3.75%.
Dude, I am fairly certain, but can't recall the specifics, but I believe that after the first year, you can request, and I believe circumstances where you can demand, that you be released from the PMI requirement.
It is one of those things that most people aren't aware of.
I suggest you check with your Lender, or before that your lawyer or your broker. A good RE attorney will know.
Did a quick google!
Opps, PMI on FHA loans apparently are for the life of the loan. Another thing to consider when thinking FHA:
The OP in this thread is an idiot of enormous proportions, but there is a VERY informative post later in the thread (an example of what I deem substantive and comprehensive):
My mortgage is now $1730 with another $100 for the HOA. That's after the refinance. Taxes are included in that total.
So basically you were paying close or more than 2k prior to your Re-Fi deal and now you're paying about $1,800.
Even at 2k/mo that's not bad for a townhouse (granted it's located in SI), so that gives me another option if I wanted to jump into an FHA-approved home.
As other posters have pointed out, you might be paying more now (and over the long run) than if you took out a conventional loan, but coming up with a decent down payment (>20%) is not easy. I can also see the lure of buying right off the bat, a bigger place and don't worry about selling or buying again, once the family grows bigger.
As other posters have pointed out, you might be paying more now (and over the long run) than if you took out a conventional loan, but coming up with a decent down payment (>20%) is not easy. I can also see the lure of buying right off the bat, a bigger place and don't worry about selling or buying again, once the family grows bigger.
Easy? No.
The reality is though, that people do it. Most people.
If you are young. Make a plan. Stick to it. Overtime, second job, whatever. 5 year plan.
People do what they have to do, BUT if you investigate just HOW much *more* over 30 years, you might think twice!
Get yourself a spreadsheet and play the numbers game....
Quote:
Oh decisions, decisions.
No, homework, homework!
It is the biggest and most defining decision of your life! The effort and homework s/b commensurate.
Btw, the old manner of buying small, and buying bigger later may be a thing of the past. Maybe not. Though, most people count the equity buildup in their first home to buy their second home.
The way things are now, that may be more difficult than in the past.
Agreed regarding the equity issue. Our plan is to use my VA loan for the next home we purchase. We may even keep this home to rent as I have a family member who will never be able to buy a home again but has a steady income stream which won't end until death.
Purchasing a home is not always the best decision, especially in this area. The low real estate taxes coupled with the interest write off do make it something important to consider though. I purchased because at the time, I had a great salary and no write-offs. Now, with two kids, the write-off isn't as important, but I still believe I made the correct choice because I was not comfortable dealing with landlords.
Agreed regarding the equity issue. Our plan is to use my VA loan for the next home we purchase. We may even keep this home to rent as I have a family member who will never be able to buy a home again but has a steady income stream which won't end until death.
Purchasing a home is not always the best decision, especially in this area. The low real estate taxes coupled with the interest write off do make it something important to consider though. I purchased because at the time, I had a great salary and no write-offs. Now, with two kids, the write-off isn't as important, but I still believe I made the correct choice because I was not comfortable dealing with landlords.
Co-ops are not excluded by HUD for a FHA loan, and are covered by section 203(n). The down payment comes into question with a resale, as you would be subject to board approval. However, if you can find a sponsor unit, you may be able to get an FHA on a co-op. A board approval would be nil with FHA, considering the 20%+ down payment requirement, but a sponsor can do whatever they want, sell to whomever they want, etc., even if the building already has a board in place.
Some buildings have difficulty getting approval for mortgages when there are too many sponsor-owned units, but if the unit were converted from a rental, it may not be impossible to secure FHA financing with the lower down payment. An FHA-approved lender experienced in the city should be able to give guidance in this regard, as the significance of co-ops in the NY market is larger than the rest of the country.
For condos, HUD has a search function that gives guidance as to previously approved buildings/projects. You can check HUD's website at: https://entp.hud.gov/idapp/html/condlook.cfm
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All the world's a stage, and all the men and women merely players: they have their exits and their entrances; and one man in his time plays many parts, his acts being seven ages.
~William Shakespeare (As You Like It Act II, Scene VII)
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