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Old 06-17-2013, 09:21 AM
 
5 posts, read 13,197 times
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my wife is the bread winner and will be only one on the mortgage. We got preapproved for 3.5% FHA loan through a lender for up to 120,000 and we plan to move to North Port. I recently read that FHA changed its policies to make it so you cannot get rid of PMI insurance at all through the life of the loan. Will the PMI go down as we pay off the house because at 120,000 the PMI is $125 a month and that is quite expensive. Where we plan to buy a house is considered Rural by the USDA and qualifies for a USDA Mortgage. Would a USDA mortgage be better for us than an FHA. Keep in mind we are wanting to put down lowest possible down payment and have lowest possible monthly payment. My wife has good credit in the high 700's. I don't want to go get another credit pull on her history by going to another lender without getting some tips on which mortgage would be best for me. Any advice would be greatly appreciated. Thank you all.
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Old 06-17-2013, 09:46 AM
 
Location: Austin
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USDA is income base, and both of your incomes will come into play to see if you qualify. It's not just the house and the area that has to qualify, but you have to fit into the box as a family. It's based on income per how many family members in the house. USDA also has a funding fee of 2% which rolls into the loan. It might be 0% for your down payment, but it's really 2%. They have to make money somehow...

FHA has MIP, not PMI. Yes, it stays the same for the life of the loan. You can drop it by refinancing later into a conventional loan if that's what you want to do. Also, FHA rates are lower than conventional rates so that MIP offsets what you would get with a conventional rate.
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Old 06-17-2013, 10:06 AM
 
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i called USDA and they sent me application email since i cannot find anywhere on the internet that lists what local lenders offer USDA loans. Our income meets the requirements. Do you think a USDA would be better than an FHA. Many people say USDA loans are not popular because people dont know about them but they are in everyway better than an FHA. I will keep on the search for a local lender who can advise me but i haven't had any luck yet with these USDA loans.
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Old 06-17-2013, 11:33 AM
 
Location: Eastern Colorado
3,876 posts, read 5,416,858 times
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Yes USDA loans are better then FHA, the upfront funding fee is considerably lower, the monthly mortgage insurance in cheaper, and you can get in for 0 down payment. If you fit in the box, and the house is in a qualifying area, USDA is almost always the way I recommend people buy their 1st house.
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