San Diego Housing Bubble News and Analysis

Your FHA Up Front Mortgage Insurance is 1.75% of the loan amount or $7,875.

If you are paying 5.50% you are paying to much.

talk to hls, at 10%, fha might not be the most cost effective, at 3.5 or 5% it has more merits.

There are two costs to fha PMI and they are unique to fha, there is upfront fee and a monthly.

http://www.fha.com/mortgage_insurance.cfm

1.5% upfront insurance premium and
.5% annual premium paid monthly

so 6k upfront and 2k per year or $170/mo on top of that.

You can get the seller to pay the 6k as part of the deal and then you pay the $170 until you get to the required equity level.

The interest rate is just hypothetical. So I would pay a one time fee of $7,875 and no additional monthly payment?

Thanks,

I was typing at the same time as mortgage mentor, why do you list 1.75 when fha's website says 1.5?

You pay both, you have to, it's been like that for decades, that is how they cover losses, that is what insurance does, that's also while they were giving money away a few years ago nobody used them, now it's popular again, but they actually make sure you can repay and you pay for the right to not drop 20%

I think it's 1.75% for purchase loans but as low as 1.5% for some refis.

The link above is to FHA.com which is not an official site. (But it's just about impossible to find useful information on the actual official government site, hud.gov.)

Thanks ak, I knew there had to be a reason, as the night wears on and the wine bottle empties, my skills decline. It's a whole different discussion, but how the hell does the government allow fha.com to be run by a non government entity, I'm losing faith in my government, in a perfect world, wouldn't they just kill them, it's taking the steam out of the conspiracy theories, how the hell can they manipulate an entire market if they can't control a few domain names.

There are two mortgage insurance premiums on FHA Loans, upfront and monthly.

You would also pay a monthly MIP of .55% of the loan amount divided by twelve.

FYI: Your minimum downpayment is 3.5%

Here is a link to my site: http://www.YourFhaGuru.com for everything you ever wanted to know about FHA.

Bill

Thanks, I will look into it. It is damn hard for first time buyer to save enough for 20% and still have some extra cash.

Who is giving you this info? You do not need to go FHA if you have 10% down. That is a total waste of you money because you are going to pay PMI and an upfront PMI fee.
You can go conventional with 10% down as long as you are under the $417,000 which you are!!!
PMI will be about $200 extra month. Your closing costs will be about $4,000 for a conventional and about $12,000 if you go FHA.

You'll still need PMI at 10% down, and for any conventional loan with LTV > 80%. If your credit is merely "good" and not "immaculate" FHA might be the better deal. Plus there's a big difference between 3.5% and 10% ... and these are crazy times, liquidity is important :)

Single-premium mortgage insurance is another option ... I think you'll end up paying at least 3% up front on top of 10% down, but no monthly premiums after that ... but I'll leave the detailed analysis to the mortgage experts.

Sometimes I really wonder about sellers' thought processes ... but if I were a seller, I'd give a strong FHA offer the same consideration as a 10% down conventional offer. FHA will insure any eligible property that passes inspection and appraisal, while from what I've seen, mortgage insurers have complex and bizarre underwriting rules that put even lenders to shame.

This is a faux paus, it's not a yellow card ejection, not even a 15 yard unsportsmanlike penaly, just a friendly warning that 5 day members wont be taken seriously if their third post ever contains a link to their "for profit" website, service or business.

While facts are welcome, expert opinion and frontline reports are encouraged, marketing is frowned upon, especially for new members.

Welcome to the site, bill, your opinion and input may be valuable, but no more links to your site until you've put in some time and some heavy lifting. It's mostly for your benefit, this is a rough crowd and not one to market to without thinking about it, if you so much as charge a piggy $50 more than someone else would, there will be hundreds of posts and threads about it, and your future non-piggington clients will easily find it using google and your name or website name. These guys will write three pages of posts about a $10 charge from the cable company that they feel was unwarranted. We are the "fine print readers" and we can be more trouble than we are worth.

Is your number correct? Is this for a 30 year or 40 year loan? For a 30 year mortgage, P+I @4.625% is $2,291.52. You can get 4.625% w/aimloan.com right now with 1.892 points. If you don't want to/can't pay points, then it's 5.125% w/out points. This is w/ no escrow impound. It's a little cheaper if you want to impound. So, why do you want to pay 5.5% for FHA when you can get anywhere between 4.625-5.125% w/ the same 10% down going through tradition lending channel?

APR on 5.125% FHA interest loan through aimloan.com is over 5.5%.

OK, but why would you want to go with FHA when you have 10% down?

In case of one of my employees - recommended by his mortgage broker, who is recommended by his "aunt's friend" agent.
He was sold on FHA with an origination point, discount point and another $2.5K in fees (ex-escrow), all resulting in 5.75%APR.

The aimloan.com cost was $6K less than the friendly broker's cost and better APR on top of that. All that on a $140K condo.

FHA isn't really a loan, it's a guarantee/oversight program. Brokers can screw you or overcharge you on any loan program. Think of it like a car dealer, the manufacturer isn't usually the one gouging people, it's the individual dealerships charging suckers a grand for paint sealant or scotchgard or whatever.

Why bother... it is aunt's friends buddy :)

Condo rates are substantially higher for both FHA and conventional. That might explain some of the difference.

But yeah it's silly not to shop around. I know too many people who've been steered into the wrong mortgage, or even defrauded, by people they thought were trusted personal friends.