FHA loans; why not?

[scaredyclassic]

the other problem with the 6-10% return theory is that if the housing market recovers, doesn’t my FHA payment go down? so Im not really guaranteed i pay more with fha, only if the market doesn’t recover and i don’t have an equity stake high enough to cancel out the higher loan payment with FHA.

for instance. what if housing goes up 20% in 5 years? then the FHA PMI is cancelled out. I’m not paying more per month. if i only get the 3828 benefit annually for 5 years, then I saved 19,000. net loss, 21,000, since I put down 40k to save 19k, not counting the 6k premium that’s done when we settle up. So not only am I not getting anything, I’m LOSING money by putting money down. IS THIS A POSSIBLE SCENARIO? if so, and it is even somewhat likely, it seems insane to put down 20% Seems like putting 20% down is kind of a bet that housing will continue to go down, in regard to the choice between fha and conventional, since the benefit from 20% down only accrues relative to fha if housing continues to tank. But if housing continues to tank, that seem to militate in favor of FHA.

what am I missing? i would hate to put down 20% and figure out afterwards that it was absolutely irrational. I really appreciate input from people who’ve thought this through more deeply than me…

[an]

[quote=Adebisi]I see that AN left out the return you could get on that $40K down payment if you invested it in something as opposed to putting it into a depreciating house.

Just think what that $40K could do in gold. You could double your money in 5 years.

I think I’m starting to see how AN came to have complete, total, and unquestioned faith in HLS. He’s clearly not the smartest cookie in the bowl.[/quote]
Did you not read the part where I said the monthly payment number is from 0% down. How much can you make from $0? The monthly payment difference is much larger if you actually calculate with a down payment. The cost difference is money down the drain. $320k 30 yr. loan w/ 4.75% would have a monthly payment of $1669.

[an]

[quote=Adebisi]I see that AN left out the return you could get on that $40K down payment if you invested it in something as opposed to putting it into a depreciating house.

Just think what that $40K could do in gold. You could double your money in 5 years.

I think I’m starting to see how AN came to have complete, total, and unquestioned faith in HLS. He’s clearly not the smartest cookie in the bowl.[/quote]
Did you not read the part where I said the monthly payment number is from 0% down. How much can you make from $0? The monthly payment difference is much larger if you actually calculate with a down payment. The cost difference is money down the drain. $320k 30 yr. loan w/ 4.75% would have a monthly payment of $1669.

[an]

[quote=Adebisi]I see that AN left out the return you could get on that $40K down payment if you invested it in something as opposed to putting it into a depreciating house.

Just think what that $40K could do in gold. You could double your money in 5 years.

I think I’m starting to see how AN came to have complete, total, and unquestioned faith in HLS. He’s clearly not the smartest cookie in the bowl.[/quote]
Did you not read the part where I said the monthly payment number is from 0% down. How much can you make from $0? The monthly payment difference is much larger if you actually calculate with a down payment. The cost difference is money down the drain. $320k 30 yr. loan w/ 4.75% would have a monthly payment of $1669.

[an]

[quote=Adebisi]I see that AN left out the return you could get on that $40K down payment if you invested it in something as opposed to putting it into a depreciating house.

Just think what that $40K could do in gold. You could double your money in 5 years.

I think I’m starting to see how AN came to have complete, total, and unquestioned faith in HLS. He’s clearly not the smartest cookie in the bowl.[/quote]
Did you not read the part where I said the monthly payment number is from 0% down. How much can you make from $0? The monthly payment difference is much larger if you actually calculate with a down payment. The cost difference is money down the drain. $320k 30 yr. loan w/ 4.75% would have a monthly payment of $1669.

[an]

[quote=Adebisi]I see that AN left out the return you could get on that $40K down payment if you invested it in something as opposed to putting it into a depreciating house.

Just think what that $40K could do in gold. You could double your money in 5 years.

I think I’m starting to see how AN came to have complete, total, and unquestioned faith in HLS. He’s clearly not the smartest cookie in the bowl.[/quote]
Did you not read the part where I said the monthly payment number is from 0% down. How much can you make from $0? The monthly payment difference is much larger if you actually calculate with a down payment. The cost difference is money down the drain. $320k 30 yr. loan w/ 4.75% would have a monthly payment of $1669.

[smshorttimer]

I’m not going the FHA route, but we are debating how much to put down. Even if we put down 15 percent, we would still have to pay PMI for 42 months to get the LTV to 80 percent — that’s ignoring appreciation, of course, which I’m not expecting. $4883 worth of PMI payments is a lot simply to preserve cash, although I am leaning that way.

It’d be pretty easy to make that $ back in investments should we get a repeat of this year’s rally, but I ain’t expecting that either.

[smshorttimer]

I’m not going the FHA route, but we are debating how much to put down. Even if we put down 15 percent, we would still have to pay PMI for 42 months to get the LTV to 80 percent — that’s ignoring appreciation, of course, which I’m not expecting. $4883 worth of PMI payments is a lot simply to preserve cash, although I am leaning that way.

It’d be pretty easy to make that $ back in investments should we get a repeat of this year’s rally, but I ain’t expecting that either.

[smshorttimer]

I’m not going the FHA route, but we are debating how much to put down. Even if we put down 15 percent, we would still have to pay PMI for 42 months to get the LTV to 80 percent — that’s ignoring appreciation, of course, which I’m not expecting. $4883 worth of PMI payments is a lot simply to preserve cash, although I am leaning that way.

It’d be pretty easy to make that $ back in investments should we get a repeat of this year’s rally, but I ain’t expecting that either.

[smshorttimer]

I’m not going the FHA route, but we are debating how much to put down. Even if we put down 15 percent, we would still have to pay PMI for 42 months to get the LTV to 80 percent — that’s ignoring appreciation, of course, which I’m not expecting. $4883 worth of PMI payments is a lot simply to preserve cash, although I am leaning that way.

It’d be pretty easy to make that $ back in investments should we get a repeat of this year’s rally, but I ain’t expecting that either.

[smshorttimer]

I’m not going the FHA route, but we are debating how much to put down. Even if we put down 15 percent, we would still have to pay PMI for 42 months to get the LTV to 80 percent — that’s ignoring appreciation, of course, which I’m not expecting. $4883 worth of PMI payments is a lot simply to preserve cash, although I am leaning that way.

It’d be pretty easy to make that $ back in investments should we get a repeat of this year’s rally, but I ain’t expecting that either.

[SD Realtor]

Actually it is a pretty easy calculation and varies with each buyer. At some point the additional interest you pay over several years will catch up with the return you have on the principal you invest. Furthermore don’t forget to include taxes on that return you make. Also I believe the point of the original poster had more to do with walking away from the home then anything else.

If you freely admit that you can walk away from a home without care, then it is a no brainer to go FHA.

[SD Realtor]

Actually it is a pretty easy calculation and varies with each buyer. At some point the additional interest you pay over several years will catch up with the return you have on the principal you invest. Furthermore don’t forget to include taxes on that return you make. Also I believe the point of the original poster had more to do with walking away from the home then anything else.

If you freely admit that you can walk away from a home without care, then it is a no brainer to go FHA.

[SD Realtor]

Actually it is a pretty easy calculation and varies with each buyer. At some point the additional interest you pay over several years will catch up with the return you have on the principal you invest. Furthermore don’t forget to include taxes on that return you make. Also I believe the point of the original poster had more to do with walking away from the home then anything else.

If you freely admit that you can walk away from a home without care, then it is a no brainer to go FHA.

[SD Realtor]

Actually it is a pretty easy calculation and varies with each buyer. At some point the additional interest you pay over several years will catch up with the return you have on the principal you invest. Furthermore don’t forget to include taxes on that return you make. Also I believe the point of the original poster had more to do with walking away from the home then anything else.

If you freely admit that you can walk away from a home without care, then it is a no brainer to go FHA.

[Author]

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