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Builder lender is charging me around 6000$ for closing costs. I complained about high closing costs. Then they suggested me FHA, which has closing costs of around 2500$. Im going 100% financing. I read it online that unless if I cant afford closing costs, not to go with FHA. However I will be getting 10000$ as incentives from builder, if I go with the builder lender, which can be used as closing costs.
Bottom line- I will be saving around 3500$ for the closing costs , if I go with the FHA. I want to know, is it worth going out with FHA?. I heard I would have to pay PMI till 80% of down payment with FHA otherwise 20% with conventional loan.
With todays housing market you might be able to get the builder to pay some or all of those closing costs. Try and find out if your neighborhood is completely sold out, with some brave negotiating you may scare the lender into paying the costs for you.
If you have a real estate attorney they could really work some wonders for you. I would look into it.
Builder lender is charging me around 6000$ for closing costs. I complained about high closing costs. Then they suggested me FHA, which has closing costs of around 2500$. Im going 100% financing. I read it online that unless if I cant afford closing costs, not to go with FHA. However I will be getting 10000$ as incentives from builder, if I go with the builder lender, which can be used as closing costs.
Bottom line- I will be saving around 3500$ for the closing costs , if I go with the FHA. I want to know, is it worth going out with FHA?. I heard I would have to pay PMI till 80% of down payment with FHA otherwise 20% with conventional loan.
Please help..
Depending on the value of the loan you should be able to get your conventional closing costs down from where they are at, as for the PMI, you will have to pay your conventional loan down to 80% unless you have a 2nd, with FHA you only have to pay it down to 75% of the loan. So it is really not that big of a difference for the 1st 5+ years of your loan, except FHA insurance has been running cheaper for new borrowers the last few months then it has for conventional loans in Colorado.
Builder lender is charging me around 6000$ for closing costs. I complained about high closing costs. Then they suggested me FHA, which has closing costs of around 2500$. Im going 100% financing. I read it online that unless if I cant afford closing costs, not to go with FHA. However I will be getting 10000$ as incentives from builder, if I go with the builder lender, which can be used as closing costs.
Bottom line- I will be saving around 3500$ for the closing costs , if I go with the FHA. I want to know, is it worth going out with FHA?. I heard I would have to pay PMI till 80% of down payment with FHA otherwise 20% with conventional loan.
Please help..
Unless FHA has very recently changed it's regs, they are going to require a downpayment of about 3%. You may want to check with a local lender that deals with FHA.
Builder lender is charging me around 6000$ for closing costs. I complained about high closing costs. Then they suggested me FHA, which has closing costs of around 2500$. Im going 100% financing. I read it online that unless if I cant afford closing costs, not to go with FHA. However I will be getting 10000$ as incentives from builder, if I go with the builder lender, which can be used as closing costs.
Bottom line- I will be saving around 3500$ for the closing costs , if I go with the FHA. I want to know, is it worth going out with FHA?. I heard I would have to pay PMI till 80% of down payment with FHA otherwise 20% with conventional loan.
Please help..
My suggestion is you wait to buy unless you have 20% down. Home prices will probably go down also. 10% down should be a minimum.
I've been told by banker types that if you are financing that much you will be paying mortgage insurance anyway. Apparently, it isn't always disclosed in this way, but lenders must and do protect their investment from risk and the borrower pays the premium.
Sorry I don't know the whole story, but maybe this will be enough that you can ask a more knowledgable professional.
Since you are approved through the builders lender and know you can get the financing, just go to another lender to find out what their costs would be to close the same loan and then what would it be to do FHA. Often times the closing costs through the builder are inflated somewhat...it's part of how they make their money. So, go speak with someone else..mortgage broker or directly with a bank. Shop the loan out.
Builder lender is charging me around 6000$ for closing costs. I complained about high closing costs. Then they suggested me FHA, which has closing costs of around 2500$. Im going 100% financing. I read it online that unless if I cant afford closing costs, not to go with FHA. However I will be getting 10000$ as incentives from builder, if I go with the builder lender, which can be used as closing costs.
Bottom line- I will be saving around 3500$ for the closing costs , if I go with the FHA. I want to know, is it worth going out with FHA?. I heard I would have to pay PMI till 80% of down payment with FHA otherwise 20% with conventional loan.
Please help..
First off let's start with...the best lenders never work directly for a builder and the builder usually offer up a big chunk of something to use his lender. BUT, these lenders almost always charge more in rate and/or fees to make up for what the builder is "giving".
Secondly, the amount of closing costs is not tied to the loan product. The costs are determined by the interest rate you want. You can always go higher on the rate and lower on the costs and vice versa. You can also have the builder pay all the closing costs, but it will be reflected in your sales price.
The FHA option will require a small down payment (2.25%) and you are required to have 3% of your own (or gifted) money into the transaction. So, that may or may not be an option.
The mortgage insurance works pretty much the same way either way you go.
You need to compare what the builder is "giving" you for using his lender to what other lender can offer you. Go see another lender and compare.
My suggestion is you wait to buy unless you have 20% down. Home prices will probably go down also. 10% down should be a minimum.
How can you tout what a minimum down payment should be for someone you don't know??
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You may be able to get a deal
