" FHA has an upfront fee of 1.75% which is wrapped into your loan and a monthly fee of 1.30 % if the original loan amount to value is less than 95% and 1.35% if you put less than 5% down."
Untrue, this is a 15 year and it's .45 for 90% LTV and under and .70 for over 90% LTV.
"Typically, once you reach a 20% equity position, the PMI is removed. Not so with the new FHA loan changes. The insurance stays on your loan for the life of the loan for all new loans starting in June 3, 2013."
Also untrue. Not all FHA loans have insurance for the life of the loan, if the LTV is 90% LTV or less the MIP lasts for 11 years.
Please make sure you have a licensed mortgage loan officer in your state do a side by side comparison for you so you get the facts.
My rates are way better, but I would need to know a bit more, is this home owner occupied or a rental?
How much do you owe on the house. etc.
contact me if you like more information
As for FHA, if you have less than 20% equity, please be aware of some very expensive changes that have been made with FHA loans. Because you would be putting less than 20% down, you will be required to pay mortgage insurance. FHA has an upfront fee of 1.75% which is wrapped into your loan and a monthly fee of 1.30 % if the original loan amount to value is less than 95% and 1.35% if you put less than 5% down.
Typically, once you reach a 20% equity position, the PMI is removed. Not so with the new FHA loan changes. The insurance stays on your loan for the life of the loan for all new loans starting in June 3, 2013.
For example, if you are paying $112.50 (borrowing $100,000) per month in mortgage insurance and you pay the mortgage for the full 30 years, you will have paid $40,500 for insurance that benefits the lender.
Make sure you weigh the long-term costs to the short term benefits before you go get a loan.
Generally, Conventional is going to be less expensive because they don't charge an up front fee of 1.75% like FHA does, and FHA requires monthly PMI regardless of the amount of equity you have in the home, while Conventional does not require PMI if you have 20% equity.
However, if your credit scores are lower (below 700) then the rate you pay might be higher on Conventional than FHA.
I can tell you that there are way better rates available on the 15 yr program right now (FHA and Conventional), but your credit scores and the amount of equity in the home will determine whether you qualify for the lowest rate or whether it will be a little higher.
Feel free to call and we can discuss YOUR particular details and figure what the best option avaialble is for your circumstances.
Tony Grech | Mortgage Loan Originator | NMLS 977416
PMAC Lending Services, Inc.
24901 Northwestern Highway Suite 407
Southfield, MI 48075
Direct (248) 728-0078 | Fax (248) 595-7130 | Cell (313) 622-7383