Tag Archives: fha home loan

Do You Know How Much Money You Need To Buy A Home

Buying a home is not so easy as it once was, and in the past few years since the recovery it has even gotten more expensive.   The thing is every one wants the 100 % financing deal as if they were buying a car.  Yes there are loans out there with only 1/2 % down.  But you still have closing costs.  Yes there are some sellers that will pay for most if not close to all your closing costs.

But here is the thing those scenarios are not always typical but if you have to stick to that scenario that you want a house with putting little to nothing in the process you will have to be very, very , very patient.

Because most sellers to not want to pay for all of your closings costs unless they are selling the house at a premium, but even then the house has still has to appraise in value.  Not to mention the loan that you may be trying to get is basically going to be govt. sponsored so an FHA loan or VA loan.  Sometimes the house may be in need of repairs and, so that home you want may not qualify for that loan.   Or someone may have to do the repairs and the seller may not want to so you may have to do the repairs on a home that is not even yours, and you are not guaranteed to close on the deal.  But the lender wants those repairs done period.

Bottom line is just be as prepared as possible, its better to have some funds so that you can negotiate.  Best case scenario unless you are doing a VA loan or USDA loan have 5% for the down payment.  So you can get rid of PMI anything less than that you will get with mortgage insurance.  That is as long as we talking about buying this house as your primary.  If you are doing a VA Loan or USDA loan you are in luck they do not have any PMI and which can be several hundred dollars on top of your regular mortgage payment limiting you on how much house you can qualify for.

But you should at least have 3.5 % saved up of whatever you are trying to buy, so you have some room to bargain and negotiate.  Lets say you cannot get the seller to pay for any of the closings costs or repairs.  Then apply for a FHA home loan with down payment assistant and use some of the 3.5% that you have saved up to pay for those closing costs.   The point is, save up money, I know we all like free stuff but the idea of buying a home with nothing down and no costs should not be one of them.  If you would like to see what kind of loans you can qualify for let me know.

Bookmark and Share

Are You Planning On Getting An FHA Loan What You Need To Know

 

David asks…

Does anyone know of any upcoming FHA guideline changes?

I am suppose to be getting FHA. Just worried cause there is so many things going on with the market that in a few weeks it may be impossible to get a loan.

admin answers:

One of the major changes that FHA has done in recent years is the change in how the principal mortgage insurance ( PMI) now works when getting a home loan.  As of June of last year 2013 if you were getting a FHA home loan and were planning only putting down the required 3.5%.  The PMI would be for the life of the loan.  This is a huge difference since it use to be that after 5 years the premium that you were paying for the insurance would go away.

Now if you do plan on putting down more at least 10% then the PMI will only be active for 11 years.  That is assuming that you are doing a 30 year mortgage.   PMI is basically insurance that the Federal Housing Administration  (FHA) charges you the consumer if you want this home loan, hence the term FHA loan.  It really give you no benefit other than being able to get the home loan.   It is really for the banks, in case you do not pay on your mortgage and they have to foreclose on you.   FHA will step in and cover any losses the bank suffer due to the foreclosure.   PMI is calculated based off of your loan amount.  There is a 1.75 % upfront cost that can be financed and then there is the annual fee of 1.35% that is divided by 12.   So for example on a $200k loan the upfront cost would be $3,500.00, and the monthly premium added to your mortgage payment would be $225.00

You can try to avoid paying PMI by trying to qualify for a conventional loan some loans allow you to avoid the monthly PMI with as little as 5%.  As long as you qualify for a conventional loan based off of credit etc.

Bookmark and Share