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Old 03-07-2012, 03:47 PM
 
7 posts, read 12,935 times
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I am sure this as been asked time after time.....sorry...
But..........
With excellent credit, are there other options besides FHA, to get a loan with 3.5% down on a home? Not a first time buyer and we make too much to qualify for a USDA loan.

FHA is not out of the question, its just we would like to spend more than the FHA loan limit on a home.
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Old 03-07-2012, 03:54 PM
 
4,982 posts, read 12,659,136 times
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Quote:
Originally Posted by charlotte to asheville View Post
I am sure this as been asked time after time.....sorry...
But..........
With excellent credit, are there other options besides FHA, to get a loan with 3.5% down on a home? Not a first time buyer and we make too much to qualify for a USDA loan.

FHA is not out of the question, its just we would like to spend more than the FHA loan limit on a home.
5% down conventional.
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Old 03-07-2012, 10:35 PM
 
Location: El Dorado Hills, CA
3,724 posts, read 8,944,346 times
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Or buy a Fannie Mae HomePath foreclosure. They have a 3% down payment, no PMI, but I don't know the loan limits.
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Old 03-08-2012, 11:33 AM
 
7 posts, read 12,935 times
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Originally Posted by NinaN View Post
Or buy a Fannie Mae HomePath foreclosure. They have a 3% down payment, no PMI, but I don't know the loan limits.
Thank you! I have looked at those. The good ones seem to get gone as soon as they are listed. I will keep my eye out though. Thank you
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Old 03-10-2012, 06:58 AM
 
Location: MID ATLANTIC
8,204 posts, read 20,313,892 times
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There sure are better options.......80/15/5. But you don't say how high you want to go, you can only do the 80/15/5 with a conforming first trust (417). That would put you around a 521K sales price.

Why pay that much mortgage insurance?
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Old 03-10-2012, 08:37 AM
 
7 posts, read 12,935 times
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Originally Posted by SmartMoney View Post
There sure are better options.......80/15/5. But you don't say how high you want to go, you can only do the 80/15/5 with a conforming first trust (417). That would put you around a 521K sales price.

Why pay that much mortgage insurance?
This would be a great option! Thank you. We are looking at $400K. So, this would work.
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Old 03-10-2012, 03:09 PM
 
Location: Austin
7,205 posts, read 19,199,513 times
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Not every broker or lender does 80/15/5 anymore. You might need to shop it. Plus. the rates for the second 15% are higher and usually end up costing more the then PMI... however, if you plan on paying the 15% off in a shorter period of time than it takes to get PMI taken off, then there is an advantage.
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Old 03-10-2012, 03:28 PM
 
6,122 posts, read 8,538,067 times
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Originally Posted by FalconheadWest View Post
Not every broker or lender does 80/15/5 anymore. You might need to shop it. Plus. the rates for the second 15% are higher and usually end up costing more the then PMI... however, if you plan on paying the 15% off in a shorter period of time than it takes to get PMI taken off, then there is an advantage.
Yeah, I looked into that and it was really hard to find a lender that did 80/15/5, and even then it didn't really seem better, as even the interest on the 80% was higher than the interest rate on FHA, plus the very high interest on the 15%.

Even compared to a 5% down conventional there wasn't much difference because the interest rate for the FHA was lower and the 5% down conventional still had PMI (albeit less than FHA).
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Old 03-11-2012, 11:50 AM
 
Location: MID ATLANTIC
8,204 posts, read 20,313,892 times
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The rates on the 2nd trust aren't pretty, but the payments are lower than FHA every single time. I just ran a comparison (FHA vs. 80/15/5) for a buyer on a 471K sales price and the difference in payment was a hair under $400 a month, yet the additional cash (1.5%) required was made up in the first year of payments.
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Old 03-11-2012, 03:09 PM
 
6,122 posts, read 8,538,067 times
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Did you compare the 80/15/5 to an FHA with 5% down? Comparing a 3.5% down loan to a 5% down loan isn't really apples to apples.

Besides, 1.5% of $471K is $7,065. $400 x 12 months is $4,800, so not sure where that other $2,265 went to.

But what about once you eliminate the MIP? I was also looking at the long-term. Everyone would tell me "no one stays with the same loan for 30 years," but if interest rates increase or don't go much lower then there shouldn't be a reason to re-finance if you're able to eliminate the MIP after the 5-year minimum. Since the FHA interest rate is lower, I think I'd rather have a lower payment for the last 20-25 years than the first 5-8. The fact that an FHA loan is assumable also provides a hedge which can be a selling point in case the interest rates do go up also doesn't hurt.
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