Posted on: 17th Apr, 2009 08:12 pm
I lived in California. I understand that FHA loan is for firsttime buyer with low down payment. But am thinking of putting down 20% down payment with FHA loan because:
1- I do not want to pay PMI
2- I can get a better rate than conventional loan (BOA). one point different given by a FHA loan officer( countrywide).
3-BOA has no fee but the different in interest will add
up more than the saving on closing cost.
Please, give me your opinion. I looking for a loan now for my townhous. Thanks
1- I do not want to pay PMI
2- I can get a better rate than conventional loan (BOA). one point different given by a FHA loan officer( countrywide).
3-BOA has no fee but the different in interest will add
up more than the saving on closing cost.
Please, give me your opinion. I looking for a loan now for my townhous. Thanks
Jared, the exception to that rule are the lenders who are accepting very low credit scores. For example, I work with a lender who will accept a 500 score, but the program is FHA. So, if you have no other options such as a scenario like this, then yes it makes sense. Otherwise, I am with you.
I just went through the same thing a was screwed into paying MIP anyway. FHA loan do NOT have PMI but the have Mortgage Insurance Premiums (MIP) AND upfront MIP. You pay 1.5% of you loan upfront no matter what then you pay monthly. The only way to get out of this is to have a 78% LTV ratio in an FHA loan. The max you are allowed to put down is 20%. Toy just cant get out of it. You must pay monthly premiums for at least 5 years no matter what your LTV ratio is.
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