Since FHA has low down and is not score driven, why would anyone want a conventional loan. Are there income requirements where someone would have too high an income to qualify for FHA.
Webber, FHA is great, however, there are loan limits. So for instance, if you want to purchase a home in your area that is 300k but the FHA limit for your county is 142k, FHA can't help you much, unless you have 158k in downpayment cash.
Also, some home sellers balk at the things FHA inspectors require them to repair before they'll certify that the home meets FHA loan standards. A fellow my wife works with refused to sell his home to someone using FHA financing when he saw the cost of the repairs the inspector insisted needed to be made before the deal could close.
a low down can cause other expenses. There is a fee that is added to the sales price that raises your actual cost and monthly payment. In addition, there is PMI that can add $100/mo to your payment. What is imperative is that you look at the entire cost not just the "low downpayment" fla-tan
I am in the process of selling/buying. I was approved for 100% financing / conventional ( in case I dont get much for my house) alot of the homes I've looked at say no FHA. or VA inspections seem to be the problem. cor
I know that conventional just requires the amount of the home to be appraised high enough to be financed, repairs are not needed unless it impairs the price; also a pest inspection is not required, (but a good idea!). No PMI to pay, and I think rates are lower.
you are thinking more likely about non-conforming. PMI is required on conventional if the LTV is greater than 80%. Most lenders do require a pest inspection. Rates are comparable between conventional and FHA. fla-tan
I have a related question. I have a FHA mortgage loan, which was fine for me because a 3BD 2 BA house around here is $83000. Anyways, I want to do some home improvements, namely finish the basement and add an additional room over the garage and extend out the kitchen (well, not all at one time!) The basement project is relatively inexpensive, so we are paying cash. However, the other two projects will run about $25000, so we are interested in getting a home improvement loan. Since we just got the house in Feb we dont really have any equity.... I heard there is a FHA home improvement loan that is based upon the future equity in the home, and I have been calling around but lenders don't seem to know what I am talking about. Does anyone know about this type of loan and where I might be able to apply for one? I am concerned about qualifying for a conventional home improvement loan because my scores are still low 600's and we have only had the home for six months.
You are correct that FHA is not as score driven as conventional programs. In general, if you do not have a FHA or VA (government backed loan) then you are conventional. There are plenty of home sellers who will not accept your offer due to your financing. In addition, FHA does apply a fee on to your loan which raises your monthly payment; however, if you sell you home within 7 seven years, that fee is refunded to you. This was nice, when I refinanced my FHA to conventional, I received the check in the mail about 6 months later. They have a rule that it takes about 120 days from when you file your paperwork. A FHA loan does require an FHA appraisel which tends to be more stringent than a regular appraisel. Finally, FHA rates are just a tad higher than conventional programs, but if you can buydown a FHA loan also. Hope that helps, Mike G.
Question about FHA. 582 FICO, paid collection 14 months old. Less than $2K for downpayment, $80K house that is in good repair and not over or under valued. Chance in heck?
I have a phone number for you to call to get a package about the home improvement loan at home. Ill email you the info when I get home.
If you are asking if you could qualify, its possible. I live in Ohio. I just closed my mortgage loan in April 2002. My loan officer did the rapid rescoring thing (I think). She had my rental history added to my credit report and I think that this bumped my scores. Also, in Ohio, there is funding called (I think) ohfa. It is a 2% down payment assistance. Possibly, your state has the same thing. The offer I made on the house goes like this: Offered $118,000 ($4,000 above asking price), seller pays all closing costs and prepaids, with seller purchasing home warranty; pool, range, refrigerator and window coverings to stay. The seller agreed to this. They bought my rate down. I have a 2/1 buydown of 4.29%, 5.29%, then 6.29% over the life of the loan. At closing, the title officer gave me a check for $9.57!!! If you only have 2K, maybe you should consider the ameridream program and save the 2K for all of your prepaids like home inspection, first year's insurance and appraisel fees. I know that using FHA adds extra costs into your mortage, but there is nothing better than owning your own home!!!! Good Luck!!
For the record, I'm in Akron, Ohio. Buying a house either in Akron or on a bordering community to the south.
If your scores are in the 580-640 range and you have no open collections or chargeoffs then FHA is probably the way to go. However, if your scores are higher, then there are other options available that can save you some money. There are conventional 80-20 programs that can get you in a house with no PMI and very little out of pocket. By combining a 5/1 ARM with a 2nd, your payments will be right about where they would be with a 97% FHA with both less out of pocket and no PMI. Just something to consider. fla-tan
Something else I remember is that with FHA, they wanted you to have at least 4 open trade accounts reported paid as agreed. I think that this is why my loan officer had my rental history added? My current rental was considered a active trade line. Good luck!!
Fannie Mae has a HomeStyle Renovation Mortgage which allows you to borrow money in a single loan to buy and repair or renovate your home, based on what the property will be worth after the work is done. You may purchase a single family home or a two to four family home. Condos and townhouses are eligible too. The down payment varies depending on the type of home and whether you will be living in the home. If youre an invester who needs a loan to renovate a property, check out the Fannie Mae Homestyle investor mortgage. Fannie Mae sponsors a number of other great low/no down payment options. Check them out. Call the Fannie Mae Consumer Resource Center at 1-800-732-6643 for more info. I wish I could give you more info but I've never gotten a Fannie Mae loan. THis info is from a package I ordered from Fannie Mae.
Fla-tan how do you avoid pmi fees with a conventional loan, can you explain a little, Thanks Pam ( If your scores are in the 580-640 range and you have no open collections or chargeoffs then FHA is probably the way to go. However, if your scores are higher, then there are other options available that can save you some money. There are conventional 80-20 programs that can get you in a house with no PMI)
