FHA or not to FHA

[LA Reader]

I have been pre-approved on conventional loan (20% down) and I put in the offer stating such on a short that I think will be accepted by the bank in next few days. But as the prospect of me writing that 100k check for down payment and closing costs nears, I am starting to have doubts.

Not about buying the house but about putting down that much cash. It’s pretty much all the cash I have. Once I write that check my only reserve would be stocks and mutual funds that I don’t want to touch.

Once the offer is accepted, can I then turn around and apply for FHA loan instead of conventional? Or do I have to stick to doing conventional?

And another thing that’s making me want to do this is the fact that both banks have been a complete A***holes to me this whole process. (Wells Fargo & Indy Mac!)

And now days, it feels like the less skin you have in the house, more help you get from the government and the banks because they are afraid you’ll walk away. While you try to do the right thing, they try to gauge you every which way.

What do you guys think? Can I do this?

I’ve been reading this board for a long time and I could use you guys’ wisdom.

[an]

We’ve ran through the calculation before and the bottom line is, there are extra cost associated to FHA up front (extra fees) and over time (PMI & higher rates). Only you know your comfort level and job security. You have to decide whether it’s worth it to pay more for the house if it means you’ll have more cash reserve. My personal answer is no, but that’s just me. Why pay more than I have to just for the option of walking away or maybe get some gov. bailout.

[an]

We’ve ran through the calculation before and the bottom line is, there are extra cost associated to FHA up front (extra fees) and over time (PMI & higher rates). Only you know your comfort level and job security. You have to decide whether it’s worth it to pay more for the house if it means you’ll have more cash reserve. My personal answer is no, but that’s just me. Why pay more than I have to just for the option of walking away or maybe get some gov. bailout.

[an]

We’ve ran through the calculation before and the bottom line is, there are extra cost associated to FHA up front (extra fees) and over time (PMI & higher rates). Only you know your comfort level and job security. You have to decide whether it’s worth it to pay more for the house if it means you’ll have more cash reserve. My personal answer is no, but that’s just me. Why pay more than I have to just for the option of walking away or maybe get some gov. bailout.

[an]

We’ve ran through the calculation before and the bottom line is, there are extra cost associated to FHA up front (extra fees) and over time (PMI & higher rates). Only you know your comfort level and job security. You have to decide whether it’s worth it to pay more for the house if it means you’ll have more cash reserve. My personal answer is no, but that’s just me. Why pay more than I have to just for the option of walking away or maybe get some gov. bailout.

[an]

We’ve ran through the calculation before and the bottom line is, there are extra cost associated to FHA up front (extra fees) and over time (PMI & higher rates). Only you know your comfort level and job security. You have to decide whether it’s worth it to pay more for the house if it means you’ll have more cash reserve. My personal answer is no, but that’s just me. Why pay more than I have to just for the option of walking away or maybe get some gov. bailout.

[scaredyclassic]

it’s impossible to know. i’ve thought about this way too much. who knows what the govt will do. maybe the best possible thing will be to have a way upside down house in 3 years. maybe it’s nuts to be so upside down? who knows? maybe the govt will just write youa check to bring you back above water, like some giant floatie, no matter how bad it gets… all you can know is at least psychologically you should be ready to say goodbye to the 100,000, never plan on seeing it again, an d just be glad you are going to live in the house for a decade or two at a payment you like. as long as you are 100% resolved to the 100,00 being gone in exchange for the slightly better payment, i think it’s ok. if you think you’re going to get that money back, then , well, i don’t know. it still might be the right thing to do, to put the 20% down, but you’ll be more nervous. . crazy times. i’d say don’t do it unless you’re fine with being way underwater for 10 or 15 years.

[scaredyclassic]

it’s impossible to know. i’ve thought about this way too much. who knows what the govt will do. maybe the best possible thing will be to have a way upside down house in 3 years. maybe it’s nuts to be so upside down? who knows? maybe the govt will just write youa check to bring you back above water, like some giant floatie, no matter how bad it gets… all you can know is at least psychologically you should be ready to say goodbye to the 100,000, never plan on seeing it again, an d just be glad you are going to live in the house for a decade or two at a payment you like. as long as you are 100% resolved to the 100,00 being gone in exchange for the slightly better payment, i think it’s ok. if you think you’re going to get that money back, then , well, i don’t know. it still might be the right thing to do, to put the 20% down, but you’ll be more nervous. . crazy times. i’d say don’t do it unless you’re fine with being way underwater for 10 or 15 years.

[scaredyclassic]

it’s impossible to know. i’ve thought about this way too much. who knows what the govt will do. maybe the best possible thing will be to have a way upside down house in 3 years. maybe it’s nuts to be so upside down? who knows? maybe the govt will just write youa check to bring you back above water, like some giant floatie, no matter how bad it gets… all you can know is at least psychologically you should be ready to say goodbye to the 100,000, never plan on seeing it again, an d just be glad you are going to live in the house for a decade or two at a payment you like. as long as you are 100% resolved to the 100,00 being gone in exchange for the slightly better payment, i think it’s ok. if you think you’re going to get that money back, then , well, i don’t know. it still might be the right thing to do, to put the 20% down, but you’ll be more nervous. . crazy times. i’d say don’t do it unless you’re fine with being way underwater for 10 or 15 years.

[scaredyclassic]

it’s impossible to know. i’ve thought about this way too much. who knows what the govt will do. maybe the best possible thing will be to have a way upside down house in 3 years. maybe it’s nuts to be so upside down? who knows? maybe the govt will just write youa check to bring you back above water, like some giant floatie, no matter how bad it gets… all you can know is at least psychologically you should be ready to say goodbye to the 100,000, never plan on seeing it again, an d just be glad you are going to live in the house for a decade or two at a payment you like. as long as you are 100% resolved to the 100,00 being gone in exchange for the slightly better payment, i think it’s ok. if you think you’re going to get that money back, then , well, i don’t know. it still might be the right thing to do, to put the 20% down, but you’ll be more nervous. . crazy times. i’d say don’t do it unless you’re fine with being way underwater for 10 or 15 years.

[scaredyclassic]

it’s impossible to know. i’ve thought about this way too much. who knows what the govt will do. maybe the best possible thing will be to have a way upside down house in 3 years. maybe it’s nuts to be so upside down? who knows? maybe the govt will just write youa check to bring you back above water, like some giant floatie, no matter how bad it gets… all you can know is at least psychologically you should be ready to say goodbye to the 100,000, never plan on seeing it again, an d just be glad you are going to live in the house for a decade or two at a payment you like. as long as you are 100% resolved to the 100,00 being gone in exchange for the slightly better payment, i think it’s ok. if you think you’re going to get that money back, then , well, i don’t know. it still might be the right thing to do, to put the 20% down, but you’ll be more nervous. . crazy times. i’d say don’t do it unless you’re fine with being way underwater for 10 or 15 years.

[ugsfugs]

I posted about this before, but I am really interested to see whether FHA loans are truly recourse loans. If so, all this talk about being able to walk away from them will be moot, and I bet we’ll have another whole wave of “I didn’t know what I was signing” borrowers if the market continues to go south. I know the mortgage brokers I’ve asked about this don’t know that the buyers may be liable for the difference between what they owe on the loan and what the property sold for at foreclosure on federal loans such as FHA, VA, and SBA.

[ugsfugs]

I posted about this before, but I am really interested to see whether FHA loans are truly recourse loans. If so, all this talk about being able to walk away from them will be moot, and I bet we’ll have another whole wave of “I didn’t know what I was signing” borrowers if the market continues to go south. I know the mortgage brokers I’ve asked about this don’t know that the buyers may be liable for the difference between what they owe on the loan and what the property sold for at foreclosure on federal loans such as FHA, VA, and SBA.

[ugsfugs]

I posted about this before, but I am really interested to see whether FHA loans are truly recourse loans. If so, all this talk about being able to walk away from them will be moot, and I bet we’ll have another whole wave of “I didn’t know what I was signing” borrowers if the market continues to go south. I know the mortgage brokers I’ve asked about this don’t know that the buyers may be liable for the difference between what they owe on the loan and what the property sold for at foreclosure on federal loans such as FHA, VA, and SBA.

[ugsfugs]

I posted about this before, but I am really interested to see whether FHA loans are truly recourse loans. If so, all this talk about being able to walk away from them will be moot, and I bet we’ll have another whole wave of “I didn’t know what I was signing” borrowers if the market continues to go south. I know the mortgage brokers I’ve asked about this don’t know that the buyers may be liable for the difference between what they owe on the loan and what the property sold for at foreclosure on federal loans such as FHA, VA, and SBA.

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