Financing in Pomona>Question Details

Ben Teal, Home Buyer in Dallas, TX

FHA vs. Homepath - What are the major differences

Asked by Ben Teal, Dallas, TX Mon Nov 22, 2010

Other than a difference in rate, what are the key differences between FHA and Homepath financing?

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Direct from a Trulia blog (http://bit.ly/hAzRaj):

NEW AS OF OCTOBER 4TH FHA Cost:
Purchase Price: $400,000
3.5% down: $14,000
1% upfront MI fee: $4000 Total Loan amount: $389,860
Principal and interest: $1997.14 (rate est 4.375% no points)
Taxes (estimated): $322
Insurance (estimated): $80
Mortgage Insurance: $287.52
Total Monthly payment: $2686.66

HOMEPATH has no mortgage insurance
Purchase Price: $400,000
3% down: $12,000 down
Total Loan amount: $388,000
est interest 5.125% with one point
Principal and interest: $ 2112.61
Taxes (estimated): $322
Insurance (estimated): $80
Total Monthly payment: $2514.61
1 vote Thank Flag Link Mon Nov 22, 2010
HomePath is a great program but is limited to Fannie Mae owned homes. and is limited to lenders offering HomePath. HomePath offers the 3% down payment option, but typically others fees are higher, that may be an issue if you are getting seller paid closing costs.

FHA is a more widely offered set of programs, and more lenders offer these loans. Typically the down payment minimum is 3.5%.

Get FHA Loan Interest Rates: http://fhamortgageinfo.com/
1 vote Thank Flag Link Wed Jul 22, 2015
Great question, and some great answers below. Carl got most of the key points.

The major benefit of HomePath is NO MI. Current monthly FHA MI adds 0.9%, which is quite hefty. This is in addition to the up front MI of 1.0% at closing. Also, you can purchase a property that needs some repairs and do the repairs after closing. With FHA the seller has to pay for the repairs, which puts you out of the running on many bank owned and short sale properties.

The major draw back for HomePath is that it can only be used on Fannie Mae foreclosed homes. FHA can be used to purchase any home. The other HomePath draw back is the cost of their 3% down program. It pays to actually put 5% down, because the cost of the 97% loan is 1.875 pts higher than the 95% loan.

Most real estate agents should be able to provide you with a list of HomePath qualified homes in any area of your choice. Make sure you work with a good HomePath lender, as these loans are more difficult to document and fund. Also, make sure you get a 45 - 60 day escrow. It is a very rare case where a HomePath loan can fund in less than 45 days. Good luck in your home search. Let me know if you need a referral to a good HomePath lender. Dare to Dream.

Shel-lee Davis, QSC®
Certified Distressed Property Expert – CDPE®
Short Sale & Foreclosure Resource – SFR®
Certified HAFA Specialist – CHS®
SSG Pro®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
http://shel-lee.listingbook.com
1 vote Thank Flag Link Mon Nov 22, 2010
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0 votes Thank Flag Link Mon Aug 3, 2015
Simply the first thing is that HomePath is for specific Fannie Mae owned property that will will allow this financing.

The good news if it is, is that there is no appraisal and no PMI needed. The bad is that the rates are high on a low (3%) down payment loan.

FHA will require a full appraisal and issues with the house be rectified before closing. Fannie Mae as the seller, will not do repairs so HomePath may be the only way to go.

I do the HomePath program (not all mortgage people do) and have been successful in closing them quickly because of the lack of appraisals.

I hope this answers your question. If not, email me fred@fredglick.com or go to http://homepath.com

Best of luck,

Fred Glick, Broker, State of California
NMLS#- 133975
DRE# -1507615
USLM, Inc
Web Reference: http://homepath.com
0 votes Thank Flag Link Mon Nov 22, 2010
Homepath eliminates the need for PMI payments, which will greatly reduce your home payment. Also, Homepath requires no appraisal be done. Homepath is only available on Homepath homes, whereas FHA you have a much wider selection. There are pros and cons to both. These are just a few things.
0 votes Thank Flag Link Mon Nov 22, 2010
MI both up front and monthly for FHA none for Home Path.

Appraisal for FHA none for Home Path

Property condition requirements for FHA none for Home Path (as is)

Pricing ads for Home Path higher LTV's none for FHA
0 votes Thank Flag Link Mon Nov 22, 2010
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