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Hello everyone! I'm looking into buying a house and have a few questions that I hope I can get some insight on (I'm a first-time homebuyer). The house I'm interested in is in the $175,000 range, but at most, I could put 3% down, and that would be a stretch. (Side note: I lost my job over the summer and went through my savings, but I'm employed now with a good salary and a good credit score). The lender suggested looking into Fannie Mae's "My Community" mortgage, but I want to make sure that would be the best option. Here's what I'm considering since I can't put much, if anything, down:
-Fannie Mae "My Community" - 3% down, but I'd have to pay PMI
-Would it be better to take out a piggyback loan and put 20% down (and avoid PMI alltogether)?
-I work for a large utility company and have access to a credit union. Do employee credit unions waive PMI? Could they possibly get me a better deal than a regular bank?
-I considered an FHA loan, but the lender told me that they include a bunch of junk fees that would make my monthly payments higher.
Anyone have any thoughts about these points? I'd sure appreciate some input, as I want to make sure I get the best deal possible! Thank you!
Since you are only able to put down 3% you are pretty limited with regard to programs. Typical FHA programs require 3.5%.
Homepath and USDA Rural are the only programs I know that avoid PMI, and keep in mind your interest rate will be higher so there will be only a small savings. Interesting that you spoke with a lender and they did not explain all your options, I might call a few others, including your credit union, to find out your options.
Personally, if it was me I would look for a lower priced home, or save more for down payment. A $ 169K mortgage for a $175K home still scares me. You could end up upside quickly if the economy tanks again.
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