Way too simple to say that it adds 1.5% to the rate. It makes a 5% loan a 7% loan. It varies with the rate.
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what is the purpose of obtaining an FHA loan if the MMI is so exorbitant that it adds several hundred dollars a month onto the mtg. payment without loaning any more money?
What happened to paying the MMI premium up front??
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FHA is the ONLY game in town with a crappy credit score. With only 5% down you need 700+ with F/F.
FHA will allow much lower scores but you will also pay 2.25% funding fee up fron with FHA.
The funding fee can be added to the 96.50% loan.
The MI will be paid over the life of the loan. On any FHA loan MI is currently mandatory for 5 years, regardless of equity.
It appears that the new proposal is to pay it for 30 years if you buy with less than 10% down OR 11 years with 10% down. (the proposal is absurd)
The purpose ? To sell homes to foolish people who don’t realize that they are overpaying because this idiotic financing is available.
The govt relies on uneducated, financially illiterate homebuyers to keep the Ponzi scheme going.
Why else would they limit loan mods to 31% of income BUT approve new buyers at up to 50% of their income? Only to stretch out the fall in prices, expecting a large % to default in the future.
F/F are losing billions, FHA cannot be far behind. Most FHA losses are being covered up like cat poop in a litter box. 100% of the losses are on loans originated in the last 5 years, but an easy modification avoids booking the loss. Extend and pretend. Perpetuate the myth.
The American dream has turned into a nightmare for many. George Carlin said it best, “You’d have to be asleep to believe it”
If FHA didn’t exist, housing prices would be lower.
