[quote=jpinpb][quote=AN]jpinpb, I think right now, you should be able to get 4.5% with about 2 points. That’s about $4500 from a 80% loan w/ purchase price of $285k. That’s still $3500 less than than the $8k the government is giving you to buy. Your example doesn’t work, I agree with that. [/quote]

AN – Thanks for the explanation. I appreciate you taking the time. I still am a little confused. You said 80%. So that means putting 20% down? Not to be dense.

I have a question for anyone out there. Are those intending to eventually buy planning to put 20% down?

I originally intended to put 20% down, but w/each day hearing about the unemployment rising and the economy doing so poorly and the inventory rising and potential future decline in r.e. prices, if I bought today, I would only be comfortable putting down the minimum.[/quote]

We are going FHA with 3.5% down ourselves. We’re not in a position to put 20% down (we could do 10%), and in this economy, we view keeping our reserves high (they’ll still be in excess of 30K after the transaction is completed) as a reasonable trade-off to being stuck with a $180/mo mortgage insurance payment.

Truthfully, it’s not that bad – the reserves will be sitting earning interest in CD’s, which by themselves will bring in nearly half of what the MI payment is annually. If we had the full 20%, the 16.5% saved by not putting it in the down payment would pay for the entire thing (and that’s just figuring a 3% rate of return on the CD’s).