On the FHA side, being that this is a condo, you need to make sure that the condo complex is FHA approved. If there are any property conditions that need to be fixed, these will most likely have to be done before you can close. With Homepath this isn't usually an issue.
The key is to make sure you talk with a good loan officer who is familiar with both programs so you know what your true options are. Good luck.
FHA rates are about a 1/2 % less but you do have MIP, that comes to about 1.15%. Which makes the payment a wee bit higher. That said the ratio's are harder on Home path loans. You can not have as much debt as an FHA would allow.
Now the part that some miss is if you decide to sell in few years the FHA loan is assumeable to the new purchaser (they have to quailify) at your current rate. So if rates go up (and they will) to say 6.5% your home becomes more appealing in the market place.
Depending on what your income to debt ratios are may lean you into one or the other.
You can still ask for the 3% in buyer closing cost on a Homepath home to be paid by seller even if you are going FHA with 3.5 % down. You ned to run the numbers on each laon and always think about selling options.
Also consider the Condo Cert and Appraisal costs that come with an FHA loan which you donâ€™t have with Homepath Mortgage. I donâ€™t want rehash what has already been said. I have seen the Condo Cert cost as much as $450 on the HUD. Itâ€™s a cost that a lot of times was unexpected and not account for. Please ask your agent who is covering these cost should you decided on an FHA loan. FHA requires a Condo Cert and for the HOA to be HUD approved. Check HUD's website to make sure the HOA is also approved.
Link to look up the HOA
It isn't deductable where (currently) mortgage interest is and with FHA you are locked in with PMI for a minimum of 5 years (thats $9,900) regardless if your home value/loan exceeds 80%.
Assuming you make the same payment amount, the homepath loan will pay down quicker as the difference in interest rates will not amount to $165/mo and would be applied to the principle balance.
The Hompath loans are very restrictive in the yield spread given to the brokers and banks in the form of credit to the borrower and/or meeting an originators comp plan.
Bottom line is that it will usually have a cost above and beyond the normal closing costs at a rate up near 5% on a 30 year fixed rate.
Going FHA alows you to have the same basic payment ( includes the PMI) but at a rate in the low 4's, a buyer can be credited about 3% of thre loan amount, which is a HUGE advantage to stay cash liquid when buying a home.
I do these all day and it nusually works where buyer's come to close with no money needed!
Let me know if I can help.
Dave 847-659-1900 Home Savings of America