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user71692391

Advice

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Does a 5 year old foreclosure FORCE me to take an FHA loan?

Hi Community,I have a foreclosure from May 2008.One potential lender said they could ONLY offer me an FHA (along with the killer PMI it requires).Another potential lender qualified me for a conventional.While I know the guidelines around this are considered "good practice," does the lender have the option to offer me a conventional given the foreclosure if they feel I am low risk?I look forward to the great advice.

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Loan Options - Have foreclosure from May 2008

Answer

Great advice everyone.One of the things I am concerned about is the extra money I'll have to pay in the PMI Funding Fee and increased PMI that come along with the FHA loan. Add to that, the cost to refinance into a conventional loan in ~2 years. Not counting the refi charges, it's about an extra $13 k in PMI-related expenses in the 2 years I spend in an FHA waiting to refinance into a conventional.Everyone still think I should strike now with an FHA?(By the way, the APR I'm being quoted on the FHA is about 5.8 to 5.9%)

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Loan Options - Have foreclosure from May 2008

I'm in the market to buy a home. I had a foreclosure in May 2008.A couple of points to consider: 1) I won an award in the National Mortgage Settlement class action lawsuit filed by my State AG as the lender did not take any steps to work with me in avoiding foreclosure; 2) all other aspects of my credit, employment, income, debt-to-income ratio, etc. are "excellent" according to one Mortgage provider I've engaged.I have approximately 10% to put down, so I know I'll be stuck with PMI for a time.This Mortgage provider told me I'm pretty much stuck with an FHA loan and the increased PMI and APR that come along with that.Is this the case? Do I have other options?Should I wait 1 year, 9 months to get the conventional (and maybe have the 20% down), take the FHA and then refinance into a conventional when I'm 7 years from the foreclosure? Other options?

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