Posted on: 25th Mar, 2008 06:24 am
What are the advantages for someone who has credit scores in the mid-700's and can put down 10-15%?
I was planning on an 80/10 or 80/5 depending on much I actually put down. I then started looking at FHA loans.
What would be the advantage? Which has better rates? Conforming or FHA? I can meet all of the requirements for the FHA.
I was planning on an 80/10 or 80/5 depending on much I actually put down. I then started looking at FHA loans.
What would be the advantage? Which has better rates? Conforming or FHA? I can meet all of the requirements for the FHA.
For 10% down or more, with strong scores in the 700's, conventional conforming financing is usually the better option - interest rates are the same, mortgage insurance is slightly cheaper on conforming, and there isn't a 1.5% mortgage insurance premium on conforming like there is on FHA. With conventional options you can also elect to choose the 80/10 or 80/5 format to avoid the mortgage insurance, you can also do the same for FHA as well, but monthly mortgage insurance is still charged on FHA at 80% LTV unless you go with a 15-year fixed, and the 1.5% mortgage insurance premium is always charged on FHA.
i agree with shane in this case. Adjustments to rate and points have been recently added to most conforming loan products, but with a credit score of at least 720 they do not apply.
rates for both are quite comparable lately - it's the bottom line that counts.
rates for both are quite comparable lately - it's the bottom line that counts.
Both gentleman have advise you correctly. However FHA, downpayment requirements can be low--3 percent or less--because FHA insurance allows homebuyers to finance about 97 percent of the home's cost through their mortgage. In addition, some closing costs can be financed, reducing up-front costs. And FHA limits some fees that lenders charge—for example, the loan origination charge only 1% can be charged. Caveat with FHA it sets limits on the size of the mortgage loan that vary with location and the number of units being purchased search your county by vising HUD's website. Caveat(s) for Fannie Mae Fannie 100 program if you receive an Expanded Level 1 Approval regardless of your good credit you will be limited to 95% Caveat(s) for Freddie Mac's 80/20 or any seconds have been discontinued and you may be hard pressed to find a 2nd with decent terms. Make sure you calculate the blended rate to see what you are actually paying. Freddie Mac's Home Possible 100 and 97 have been cut to manual underwriting no more Automated Approvals. Ask yourself is Conventional worth the headache? Why don't you way out the three have your lender give you more than one scenario and take them home and make a conscious decision.
Robert Summers
CMI/MML
(Certified Mortgage Instructor)
(Master of Mortgage Lending)
Southwest Funding, LP Branch 777
41 E. 37th Street
Indianapolis, IN 46205
Office 317-925-1877
Fax 317-925-1871
Robert Summers
CMI/MML
(Certified Mortgage Instructor)
(Master of Mortgage Lending)
Southwest Funding, LP Branch 777
41 E. 37th Street
Indianapolis, IN 46205
Office 317-925-1877
Fax 317-925-1871
Hi,
I too feel taking quotes on different types of loans make sense whether they're conforming or FHA loans. Once you get the quotes, calculate the monthly payements and see what is the least. Then check the lender's service background before you decide whom to deal with.
You may even out down the offers here and get suggestions as to whether they're ok for you. Also you may use some of the mortgage calculators here.
Take Care
I too feel taking quotes on different types of loans make sense whether they're conforming or FHA loans. Once you get the quotes, calculate the monthly payements and see what is the least. Then check the lender's service background before you decide whom to deal with.
You may even out down the offers here and get suggestions as to whether they're ok for you. Also you may use some of the mortgage calculators here.
Take Care
With That score and the ability to put down 10% you should look for cost effective Conventional solutions. FHA will be more expensive due to Funding Fee, and Mortgage Insurance Premium. We offer a 90% 1st mortgage with no PMI and comparable rates. I am sure you can price around and do a comparison. Also IMHO long term you will pay more for FHA.
