Profile picture for unc1984

I owe less than 80% on my 350k mortgage. Excellent credit. Is FHA something I should look into to?

  • August 11 2013 - Tulsa
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Answers (16)

Clay, your right.  It is MI.  However, when explaining to the average borrower that they have mortgage insurance and hazard insurance, it can be confusing.  I've found that more people can relate when you preface with "private."  For me, it helps differentiate the two when clarifying to the borrower.  To each their own I guess.  Thanks for the info!  
  • January 08 2014
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I assume this Borrower closed on a Conforming refi several months ago but in case people are still reading these responses:

"FHA requires a 1.75% up front funding fee and as of 2013, private mortgage insurance will remain on the loan for the life of the loan regardless of how much you pay it down."
 

While FHA would have been a bad choice for this refi even if they met the loan limit, the Annual MI
( not PMI ) would drop off after 11 years since their LTV was 80%.  
  • January 08 2014
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FHA is not an option because the loan limit is $271,050.  I dont believe Tulsa is considered a "high Cost Area" according to FHA standards.  If it is, you would be eligible.  However, If you owe less than 80%, conventional is definitely the option you want to entertain.  FHA requires a 1.75% up front funding fee and as of 2013, private mortgage insurance will remain on the loan for the life of the loan regardless of how much you pay it down.   
  • January 08 2014
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Whoops, Clay is correct.  Sorry about that. 

  • December 30 2013
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Dustin, HUD changed the MI rules so even a 15 Year term at 78% LTV will have annual MI for 11 years.
  • December 30 2013
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The only way this might make sense is if you are looking at a 15 YR term with less than 78% LTV, in which case the monthly mortgage insurance is waived.  There is still an upfront mortgage insurance cost, but the rates may be significantly cheaper and worth the fee if you plan to keep the mortgage long enough. 

If you aren't in that specific circumstance, conventional is very likely your best option. 
  • December 30 2013
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FHA may seem more appealing due to a lower monthly interest rate; however, you have to include another 1.35% in that FHA equation due to the monthly mortgage insurance paid to FHA in your payment. Your mortgage lender should be able to show you the financial differences between FHA and Conventional to help put your mind at ease.

  • December 30 2013
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No, FHA is not something you should look at. FHA loan are more expensive. It sounds like in your case a regular conventional loan is the best option.

  • December 17 2013
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Surely you feel confident by now that FHA is not the best option for you-Conventional all the way! If you own 20% of your home then you will have no mortgage insurance and no funding fees :)
  • August 12 2013
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Profile picture for Cindy Quinton
I am a local agent, so if I can assist with a valuation of your home, I would love to do that for you. 

I'm not sure what your goal is, but assuming you want to refi and reduce your payments or get into some kind of more favorable loan, I can't see any way an FHA loan would do anything for you, but those are usually answers that only a lender with your specific information in front of him/her, can answer. If you want to speak to some local lenders, I can give you a few whom with I work regularly. Just click on my profile.   
  • August 12 2013
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It is very doubtful that FHA is going to be a viable option for you because of the pmi insurance which is meant for borrowers over 80%.  A conventional loan will more than likely be the one for you to entertain but then it will be choices between a 15, 20, or 30 year term depending on your goals and how you qualify.
  • August 12 2013
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Even if you are over 80 after the appraisal conventional is still the route. Mortgage insurance is way cheaper.
  • August 11 2013
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Profile picture for user0656247
Nope, FHA has life PMI. 
  • August 11 2013
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Profile picture for UB Home Team
FHA has "life of the loan" mortgage insurance now, so that option will add to your monthly payment... for the full term of the mortgage. May want to look into 15 or 20 year mortgage, on a conventional uninsured. Rate is lower, but overall payment may not be much lower, if at all.

The Lender will require another appraisal, to prove the <80% LTV (loan to value). Thus, I suggest contacting a knowledgeable Realtor in your area to provide a market analysis, prior to spending the $400-$500 for an appraisal.

Best of luck!
  • August 11 2013
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No FHA has mortgage insurance. You need to look into conventional financing and will need to prove you are at 80% loan to value to avoid mortgage insurance.
  • August 11 2013
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Profile picture for wetdawgs
What is your goal?  
  • August 11 2013
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