Should I go for a FHA or a conventional Loans? (insurance, mortgage broker)

[rsmirnoff]

Currently I am spending a large amount of time hunting for a good mortgage program. I have heard about the FHA programs. They are easy to get and have a little down payment (my favorite part). but I think that there might be some catch in it. Please do you have any suggestions? I would appreciate if anybody could share his/her experience. Well, It would be a pleasure if anybody could suggest me a good loan provider. Here are some of the providers I got while googling. do to have any suggestions about them?

Mortgage Rates Credit Cards Refinance Home CD Rates by Bankrate.com
MFG Mortgage Rates - Home
https://www.bankofamerica.com/index.jsp
Mortgage - Home Loans - Refinance - Mortgage Refinance - Mortgage Rates - Home Equity

[sonarrat]

This would be better asked in the Mortgage forum, but buying with a small down payment is the bad idea to end all bad ideas. There's nothing scarier than being upside down on your house.

[Mr. Fantastic]

FHA is a Federal scam to create more home owners for tax revenue, regardless of whether they are ready or not. In the past year alone, 12% of FHA buyers are already in default. If you can only put up 3.5%, you can't the home.

[clongirl]

I agree with the above. If you cannot put down 20% you shouldn't be trying to buy a house in the Bay Area.

Also, do not lend from the larger banks (like some you mentioned). They have recently been using "bait and switch" methods (recently happened to someone in my own family). They'll advertise some really good interest rate, then give you the serious run around while you're trying to close on the house. Then you end up with something that doesn't resemble what was initially advertised. Try to find an INDEPENDENT mortgage broker with good recommendations from people you know.

[rsmirnoff]

thanks guys,

@ clongirl: I agree that banks sometimes bluff people by advertising attractive rates and then turn it out into something else just by adding up a lot of different charges and taxes, but I guess making a loan with a bank would be more secure than a mortgage broker.

Well, I dont worry about securities, so I am thinking of consulting a mortgage broker soon. My cousin also got her house refinanced from a broker, I guess it was some MFG Mortgage. Can you suggest me some brokers here, or should I go with MFG Mortgage? Do you know anything about it?

[DMenscha]

You can get an FHA loan and pay more than 3.5% down. The advantage of an FHA loan is that there is no Private Mortgage Insurance (PMI) which should lower your monthly payment. Shop around, for the best rate.

[llowllevellowll]

Originally Posted by DMenscha

You can get an FHA loan and pay more than 3.5% down. The advantage of an FHA loan is that there is no Private Mortgage Insurance (PMI) which should lower your monthly payment. Shop around, for the best rate.

Ding ding ding. +1

The only logical person to respond to the actual OP's question.

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This isn't a discussion regarding the government or the political ramifications for the country, and it isn't a discussion about whether or not posters believe that the FHA or VA is a good thing or a bad thing -- it's a question about WHAT THE OP SHOULD DO!

OP, if you're a first-time home buyer and qualify for an FHA loan, you should undoubtedly accept.

While I recommend buying only if you can afford to purchase your home, the option to only put 3.5% down on your home is a fantastic option especially if you've got monies yielding a higher percentage than 5% (the approximate cost of your interest rate on your upcoming home loan.)

Or, maybe you just don't want to cough up $30-40,000 all at once with the down payment on a conventional loan. The option is UP TO YOU whether you want to make up that lost interest by doubling up payments.

Do what's best for you, and that's an FHA.

Good luck.

[Curmudgeon]

Originally Posted by Puddy4LyF

Ding ding ding. +1

The only logical person to respond to the actual OP's question.

---

This isn't a discussion regarding the government or the political ramifications for the country, and it isn't a discussion about whether or not posters believe that the FHA or VA is a good thing or a bad thing -- it's a question about WHAT THE OP SHOULD DO!

OP, if you're a first-time home buyer and qualify for an FHA loan, you should undoubtedly accept.

While I recommend buying only if you can afford to purchase your home, the option to only put 3.5% down on your home is a fantastic option especially if you've got monies yielding a higher percentage than 5% (the approximate cost of your interest rate on your upcoming home loan.)

Or, maybe you just don't want to cough up $30-40,000 all at once with the down payment on a conventional loan. The option is UP TO YOU whether you want to make up that lost interest by doubling up payments.

Do what's best for you, and that's an FHA.

Good luck.

I would agree provided the OP has a relatively stable income with good future prospects and is purchasing a house as a home, not as an investment.

We purchased our home with a no down, VA loan which worked well for us and is easily affordable. That kept other assets freed-up for furnishings, some upgrades and maintaining a nest egg as a hedge against future needs. Everyone's situation is different. While I doubt it will happen because we bought at the bottom of the market and for far less than the original asking price, we could go upside down and not be in any danger of losing our home. That's what was a remains most important to us.

[Mr. Fantastic]

Originally Posted by Puddy4LyF

Ding ding ding. +1

The only logical person to respond to the actual OP's question.

Wrong wrong wrong. +1,000,000

FHA does require PMI if you're only putting 3.5% down, an upfront PMI of 1.75%, and %0.55 annually.

Seriously, this is all available online, why spread false information? That's either laziness or ignorance. Both inexcusable.

[Mr. Fantastic]

Originally Posted by DMenscha

You can get an FHA loan and pay more than 3.5% down. The advantage of an FHA loan is that there is no Private Mortgage Insurance (PMI) which should lower your monthly payment. Shop around, for the best rate.

You're a broker and spreading that misinformation?

Your license should be shredded.