FHA Loan

[jhotsauce7]

Anyone had experience with these? I am going to try and purchase my first home, and saw I could get one of these with 3.5% down payment ... whats the dilly ? I know a little bit about it, and found some lenders that offer it... wondering if anyone has gone through with one of these and has any advice to share...

 

[IronInsanity]

The first home I bought was FHA, but that was years ago. The DP was only 3.5% then too. I think there are a few stipulations but overall a very good deal and way to go. Good luck.

 

[Kosher Fried]

3.5 down, but also 1.75% upfront Mortgage Insurance Premium, plus closing costs and escrows.

so..$200,000 purchase in Texas seems like $7000, but it's more like $15000 when you consider Owner's and Lender's Title insurance costs (around $4000 or so right there).

Lenders fees are going to be around $1000 without discount points..and you can actually finance the 1.75% FHA fee.

now if you're a disabled vet..that's the real deal. 0% down, 0 funding fee, and sellers usually pay a lot of the costs. My guy just actually got $1100 at the closing table.

Rates today should be around 3.625% FHA with no points. If you can get the seller to pay say $6000 in closing costs, you'll need about $9-10000 to cover anything over that, per diem interest, and escrow (tax cushion of 2 months, 2 months home owner's insurance, and 1 year home owner's up front)

hope that helps

 

[jhotsauce7]

Super helpful bro - Where I live i qualify for about 16,000 dollars in 0% forgivable loans from the municipality and I am hoping that will cover most of the closing costs/good faith money, and that when all is said and done I only need to drop 1-2k out of pocket...

 

[Get Some]

The thing to remember about FHA loans is that only certain housing areas qualify for the program. If you are buying a single family home, there is a much better chance that the home will qualify for the program. Through my experience, if you are buying a condo, not all of the homeowner's associations will allow FHA purchases. I'm not an expert on the topic, just sharing things I have run into in the past. If you can't put 20% down (20% eliminates the mortgage insurance) then it makes sense to go FHA with the 3.5%.

My advice to you on a first time home purchase is buy a home 10-20% below the purchase price that you qualify for. So, if you qualify for a purchase price of $280,000 then look for homes in the $225,000-$250,000 range. Trying to buy a home at or near your qualified amount usually means extra money out of pocket for closing costs and points on the back end of the loan which take the amount you owe above your qualified amount. I hope that makes sense. Also, remember, the fees on your loan are partially dependent on the difference between the rate and APR. A 3.2% rate may seem pretty good, but if the APR is over 4% you're gonna owe some not so nice fees on the back end. Last point is definitely go for the fixed rate loan, even if it is slightly higher than the adjustable rate. Adjustable rates are a terrible idea unless you know you're only going to be in that home for the initial fixed period (usually 3-7 years).

Hope that helps