This can't be good for home prices. (Casa Grande, Paradise Valley: short sale, mortgage)

[TimtheGuy]

Originally Posted by Rick Lee

I believe there is still an upfront MIP of 1.5% on FHA loans, but it's rolled into the loan amount. The monthly is .5%, IIRC. AFAIK, the only reason anyone would care about selling to an FHA borrower is that the seller has to pay the underwriting or doc. prep. fee or something like that. It's been a while since I was in that business. I think any motivated seller would be fine with an FHA.

Correct on the 1.5% upfront and the 0.5% monthly. But, the seller no longer has to pay any of the costs. They can all be paid by the borrower.

[TimtheGuy]

Originally Posted by altus2006

I have thought that FHA was a good way to go because the home gets inspected by an FHA inspector before a loan is made. There can't be too many inspections on a home, in my opinion.

However, many sellers and new home builders won't sell to a FHA buyer. Also, there used to be a mandatory 1/2% MIP on FHA loans. I don't know if this is still the % because I haven't checked out FHA loans in years.

altus2006

Actually, the appraisal is done by a FHA approved appraiser. While they do check more things than a regular appraiser it is far from an inspection.

[altus2006]

I realize that the FHA inspector is not doing a thorough job of home inspection, but they frequently find something that had been missed by the buyers.

It used to be that a new home was inspected by a FHA inspector during every stage of completion. That would be helpful to a buyer. I don't know how many builders are selling VA or FHA now days.

I watched a Channel 12 news report on the workload for housing inspectors during the height of the building frenzy and they were sometimes in and out of their vehicles within minutes, basically doing drive-by inspections. This is why I said that adding another inspection done by the FHA could not hurt.

altus2006

[_Charles_]

You need to talk to your real estate agent. This 10% requirement is coming from that lender -it is not a regulatory requirement Your real estate agent should know a good mortgage broker that can help you w/o this 10% nonesense. Keep in mind your closing costs will add another 4 to 5% to the money you will be putting down.

If your real estate doesn't know any mortgage brokers then that is a sign you are dealing with someone not well connected. If that happens - get a new real estate agent.

In short you don't have to put 10% down. You are not talking to the right people.

[hootie]

Originally Posted by Captain Bill

Hootie, who did you get this letter from? I suggest that you speak with a couple of lenders. Ask your agent to give you some names of lenders that s/he is familiar with.

It's Bank of America.

I felt like they had BY FAR the best to offer of anyone. Near zero closing costs and zero PMI.

Also I don't qualify as a first time buyer because I owned a 70k house out in the midwest.

[sablebaby]

Originally Posted by hootie

It's Bank of America.

I felt like they had BY FAR the best to offer of anyone. Near zero closing costs and zero PMI.

Also I don't qualify as a first time buyer because I owned a 70k house out in the midwest.

Charles is right. This is just ONE of MANY mortgage lenders. There are a million more. I have a good lender I can suggest through DM, if you're interested.

Basically, you didn't qualify for THAT loan. That DOES NOT mean you can't qualify for another one.

[Rick Lee]

I'm pretty sure the legal definition of first time buyer is someone who has not been on title for at least two years. So you could have owned a home a while back and still qualify as a first timer. I believe BoA's first time buyer program is called ACORN, or it used to be. A lot of banks that do FHA loans have what's called CRA (Community Reinvestment Act) loans, which are basically FHA loans with income limits but below market interest rates. Back in my day it was something like 80% of the area's median income. Around here in the DC area, that's a lot more than in most places. So a lot of people earn way, way too much to get a CRA loan. But AFAIK, FHA does not have such limits. And you don't have to go with a local bank for a mortgage.

The only catch I know about FHA-approved appraisers is that they have to register the appraisal when they do it. And that dollar amount becomes etched in stone for six mos. So if an appraisal comes in low, no one can get an FHA loan for more than that amount for six mos. It can be a real deal killer. Also, home inspectors are often in cahoots with realtors to make a deal close without problems. Ask me how I know. I learned the very hard way and it cost me thousands and headaches in water damage from burst polybutalene pipes. It was a very well known problem in my area and it's now the very first thing I look at when I see pipes in a utility room. But I didn't know about it when I got my first house. I paid for a home inspection and he made no mention of it, though he really knew his $hit. So he was covering for the realtor to make it happen fast. Anyone in the real estate business in an area that had those pipes knows all about this and no one mentioned it to me. Very expensive lesson learned. Find your own inspector and don't take referrals from a realtor. Make sure everyone you write a check to is working FOR YOU and no one else involved in the deal.

[TimtheGuy]

Originally Posted by _Charles_

You need to talk to your real estate agent. This 10% requirement is coming from that lender -it is not a regulatory requirement Your real estate agent should know a good mortgage broker that can help you w/o this 10% nonesense. Keep in mind your closing costs will add another 4 to 5% to the money you will be putting down.

If your real estate doesn't know any mortgage brokers then that is a sign you are dealing with someone not well connected. If that happens - get a new real estate agent.

In short you don't have to put 10% down. You are not talking to the right people.

It is a regulatory requirement. Did you see my post?

The declining market and the extra 5% down is coming from Fannie & Freddie not any particular lender or bank.

From their view the equity can be burnt up in a hurry in a declining market, so they want to price the loans accordingly. You can most likely still put your 5% down, but it will be considered a $0 down loan in a declining market and therefore come with a higher interest rate and possibly higher mortgage insurance.

[TimtheGuy]

Generally the definition of a 1st time homebuyer is someone who has not owned a primary residence in the last 3 years.

[Gretchen B]

Originally Posted by TimtheGuy

It is a regulatory requirement. Did you see my post?

The declining market and the extra 5% down is coming from Fannie & Freddie not any particular lender or bank.

From their view the equity can be burnt up in a hurry in a declining market, so they want to price the loans accordingly. You can most likely still put your 5% down, but it will be considered a $0 down loan in a declining market and therefore come with a higher interest rate and possibly higher mortgage insurance.

Yes, the designation as a "declining market" is adding insult to injury, for sure.

Question for TimtheGuy . . . So what about purchasing a home for 5% below comps. If the appraisal supports that, would this "cover" the additional 5% down that Fannie Mae/Freddie Mac are requiring?