FHA loans; why not?

[smshorttimer]

[quote=HLS]smshort…
If you are considering putting 15% and paying mortgage insurance, but you have the ability to put 20% down and avoid mortgage insurance completely, at that point it will be expensive money to not come up with the extra 5%…
The OP willing to walk away and take a credit hit is a different angle.

Others that talk about potential investment returns and lost opportunity value by larger down payments are just gambling.
Other advice posted is the ignorant leading the blind or vice versa.[/quote]

I’ve run the numbers many, many times in comparing different loan products and down payments. Yes, I get that I’d be paying a monthly fee for essentially peace of mind — larger cash reserve in case of job loss, mostly, and I think that’s going to win over. A double-dipper seems to be all but expected, and I am in an industry that’s considered vulnerable by most. Perhaps less so considering we’ve endured considerable workforce cuts and other cost-cutting, but still vulnerable.

But I’m still a sucker for putting down far more than a few grand.

[an]

[quote=scaredycat]how is the 10 year number wrong? what does that mean?[/quote]
Did you run the numbers for both? With 20% down and 4.75% rate, your monthly payment would be $1669. With 3.5% down FHA @ 5.375% rate and .5% MMIP, your monthly payment would be $2322. If you walk and let the bank foreclose, doesn’t your credit get screwed up for 7 years? Wouldn’t that mean you can’t buy another house for 7 years unless you’re paying very high rates for it? Are you betting then that if price fall another 4% (at which point, you’ll walk) that it’ll continue to fall for the next 7 years? Wouldn’t that be loss opportunity if price crashed in 3-5 years and starts to rebound 5 years from now? Rent and keep your 20% down is still the best case scenario. Nothing like keeping your money liquid and your credit pristine, getting ready for a great opportunity.

[an]

[quote=scaredycat]how is the 10 year number wrong? what does that mean?[/quote]
Did you run the numbers for both? With 20% down and 4.75% rate, your monthly payment would be $1669. With 3.5% down FHA @ 5.375% rate and .5% MMIP, your monthly payment would be $2322. If you walk and let the bank foreclose, doesn’t your credit get screwed up for 7 years? Wouldn’t that mean you can’t buy another house for 7 years unless you’re paying very high rates for it? Are you betting then that if price fall another 4% (at which point, you’ll walk) that it’ll continue to fall for the next 7 years? Wouldn’t that be loss opportunity if price crashed in 3-5 years and starts to rebound 5 years from now? Rent and keep your 20% down is still the best case scenario. Nothing like keeping your money liquid and your credit pristine, getting ready for a great opportunity.

[an]

[quote=scaredycat]how is the 10 year number wrong? what does that mean?[/quote]
Did you run the numbers for both? With 20% down and 4.75% rate, your monthly payment would be $1669. With 3.5% down FHA @ 5.375% rate and .5% MMIP, your monthly payment would be $2322. If you walk and let the bank foreclose, doesn’t your credit get screwed up for 7 years? Wouldn’t that mean you can’t buy another house for 7 years unless you’re paying very high rates for it? Are you betting then that if price fall another 4% (at which point, you’ll walk) that it’ll continue to fall for the next 7 years? Wouldn’t that be loss opportunity if price crashed in 3-5 years and starts to rebound 5 years from now? Rent and keep your 20% down is still the best case scenario. Nothing like keeping your money liquid and your credit pristine, getting ready for a great opportunity.

[an]

[quote=scaredycat]how is the 10 year number wrong? what does that mean?[/quote]
Did you run the numbers for both? With 20% down and 4.75% rate, your monthly payment would be $1669. With 3.5% down FHA @ 5.375% rate and .5% MMIP, your monthly payment would be $2322. If you walk and let the bank foreclose, doesn’t your credit get screwed up for 7 years? Wouldn’t that mean you can’t buy another house for 7 years unless you’re paying very high rates for it? Are you betting then that if price fall another 4% (at which point, you’ll walk) that it’ll continue to fall for the next 7 years? Wouldn’t that be loss opportunity if price crashed in 3-5 years and starts to rebound 5 years from now? Rent and keep your 20% down is still the best case scenario. Nothing like keeping your money liquid and your credit pristine, getting ready for a great opportunity.

[an]

[quote=scaredycat]how is the 10 year number wrong? what does that mean?[/quote]
Did you run the numbers for both? With 20% down and 4.75% rate, your monthly payment would be $1669. With 3.5% down FHA @ 5.375% rate and .5% MMIP, your monthly payment would be $2322. If you walk and let the bank foreclose, doesn’t your credit get screwed up for 7 years? Wouldn’t that mean you can’t buy another house for 7 years unless you’re paying very high rates for it? Are you betting then that if price fall another 4% (at which point, you’ll walk) that it’ll continue to fall for the next 7 years? Wouldn’t that be loss opportunity if price crashed in 3-5 years and starts to rebound 5 years from now? Rent and keep your 20% down is still the best case scenario. Nothing like keeping your money liquid and your credit pristine, getting ready for a great opportunity.

[blahblahblah]

Rent and keep your 20% down is still the best case scenario. Nothing like keeping your money liquid and your credit pristine, getting ready for a great opportunity.

If we have no or low inflation, that’s correct. However if we have high inflation your savings will erode and home prices will rise.

Government intervention in the housing market will only grow from here. Can you think of anything that the government gets out of once they get into it? Their interventions (both current and future) are going to cost money which will be paid for with Uncle Ben’s helicopter dollars.

What happened when government got involved in health care? Huge inflation in health care costs. Now that the government is increasingly getting involved in the housing market, what will you expect?

[blahblahblah]

Rent and keep your 20% down is still the best case scenario. Nothing like keeping your money liquid and your credit pristine, getting ready for a great opportunity.

If we have no or low inflation, that’s correct. However if we have high inflation your savings will erode and home prices will rise.

Government intervention in the housing market will only grow from here. Can you think of anything that the government gets out of once they get into it? Their interventions (both current and future) are going to cost money which will be paid for with Uncle Ben’s helicopter dollars.

What happened when government got involved in health care? Huge inflation in health care costs. Now that the government is increasingly getting involved in the housing market, what will you expect?

[blahblahblah]

Rent and keep your 20% down is still the best case scenario. Nothing like keeping your money liquid and your credit pristine, getting ready for a great opportunity.

If we have no or low inflation, that’s correct. However if we have high inflation your savings will erode and home prices will rise.

Government intervention in the housing market will only grow from here. Can you think of anything that the government gets out of once they get into it? Their interventions (both current and future) are going to cost money which will be paid for with Uncle Ben’s helicopter dollars.

What happened when government got involved in health care? Huge inflation in health care costs. Now that the government is increasingly getting involved in the housing market, what will you expect?

[blahblahblah]

Rent and keep your 20% down is still the best case scenario. Nothing like keeping your money liquid and your credit pristine, getting ready for a great opportunity.

If we have no or low inflation, that’s correct. However if we have high inflation your savings will erode and home prices will rise.

Government intervention in the housing market will only grow from here. Can you think of anything that the government gets out of once they get into it? Their interventions (both current and future) are going to cost money which will be paid for with Uncle Ben’s helicopter dollars.

What happened when government got involved in health care? Huge inflation in health care costs. Now that the government is increasingly getting involved in the housing market, what will you expect?

[blahblahblah]

Rent and keep your 20% down is still the best case scenario. Nothing like keeping your money liquid and your credit pristine, getting ready for a great opportunity.

If we have no or low inflation, that’s correct. However if we have high inflation your savings will erode and home prices will rise.

Government intervention in the housing market will only grow from here. Can you think of anything that the government gets out of once they get into it? Their interventions (both current and future) are going to cost money which will be paid for with Uncle Ben’s helicopter dollars.

What happened when government got involved in health care? Huge inflation in health care costs. Now that the government is increasingly getting involved in the housing market, what will you expect?

[UCGal]

[quote=scaredycat]being able to walk away is worth something.

I need to buya house for reasons out of my control[/quote]

I’m assuming your wife is the reason out of your control.

Wouldn’t it be just as big a problem if you bought and walked… as far as marital harmony. She wouldn’t be happy with that, would she?

I’m assuming she’s looking for stability (or at least the false sense of it.) If you enter into the transaction with the idea that you’ll walk if the prices dip… that isn’t stability.

It’s kind of like getting married with the idea that if it’s not perfect you’ll just get divorced… it’s a bad way to enter the transaction.

[UCGal]

[quote=scaredycat]being able to walk away is worth something.

I need to buya house for reasons out of my control[/quote]

I’m assuming your wife is the reason out of your control.

Wouldn’t it be just as big a problem if you bought and walked… as far as marital harmony. She wouldn’t be happy with that, would she?

I’m assuming she’s looking for stability (or at least the false sense of it.) If you enter into the transaction with the idea that you’ll walk if the prices dip… that isn’t stability.

It’s kind of like getting married with the idea that if it’s not perfect you’ll just get divorced… it’s a bad way to enter the transaction.

[UCGal]

[quote=scaredycat]being able to walk away is worth something.

I need to buya house for reasons out of my control[/quote]

I’m assuming your wife is the reason out of your control.

Wouldn’t it be just as big a problem if you bought and walked… as far as marital harmony. She wouldn’t be happy with that, would she?

I’m assuming she’s looking for stability (or at least the false sense of it.) If you enter into the transaction with the idea that you’ll walk if the prices dip… that isn’t stability.

It’s kind of like getting married with the idea that if it’s not perfect you’ll just get divorced… it’s a bad way to enter the transaction.

[UCGal]

[quote=scaredycat]being able to walk away is worth something.

I need to buya house for reasons out of my control[/quote]

I’m assuming your wife is the reason out of your control.

Wouldn’t it be just as big a problem if you bought and walked… as far as marital harmony. She wouldn’t be happy with that, would she?

I’m assuming she’s looking for stability (or at least the false sense of it.) If you enter into the transaction with the idea that you’ll walk if the prices dip… that isn’t stability.

It’s kind of like getting married with the idea that if it’s not perfect you’ll just get divorced… it’s a bad way to enter the transaction.

[Author]

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