Kristina,
Avoid an FHA mortgage if possible. Here’s why. First you’ll have to pay an FHA funding fee and you’ll have a mortgage insurance premium in your payment. You will not have these fees with a conventional loan. Fannie Mae and Freddie Mac each have a program that may meet your situation. It’s income driven. I have the limits on my web site. You can also run some scenarios. Disregard the credit score prompt when entering your credit score, this will be corrected with down payments of 20% or greater. You should also consider PHFA. I have links to web site and income and sales price limits.
Good Luck!

Kristina,

Based on Jeff's previous answer: Our solution to the FHA vs Conventional loan question would be to pay the price difference between the two products which may be seen as buying the rate down. On a 200,000 purchase if the spread was .250% to .500% to the price of the loan that's between a $500 and $1000 investment. As you mentioned there are up front and monthly cost associated with FHA that can be avoided if your situation lends itself to a Conventional loan.

As a Banker and a Broker we are blessed with so many choices for our clients we don't have that issue. Our Conventional pricing is actually better than the FHA pricing although very close.

My guess is that your initial contact may have been trying to suggest an FHA loan vs Conventional because based on your 651 credit score there is as much as a 3.00% hit (cost ) as a percentage of your loan amount to go with a Conventional loan On a $200,000 loan that's a $6000 cost or you can eat up that fee by taking the rate up about .500%. example going from 5.00% to 5.50% to avoid the 3.00% ($6000) fee for your 651 score.

I'm happy to share all the options if you give me a call 800-9712066 or 530-223-1400. The numbers will let you know exactly what's best for you. Thanks Steve Clarey Managing Partner Omega Mortgage Group

HI Kristina, the fha pmi does not automatically drop off after 5 years. You must keep that pmi for a minimum of 5 years, after which you can pay down the balance to 78% of the original loan amount and the pmi will be automatically taken out of your payment. It doesn't work the same way that conventional pmi works. It's based on the original loan amount not appraised value 5 years from now.


My current 30 year fixed in PA with 0 points at your score is 5.25% and the FHA 30 year fixed with 0 points is 4.875%.

I can also offer a 5/1 arm at 4.5% with 0 points and a 7/1 arm at 4.75% with 0 points. These are fixed for 5 and 7 years are options only if you will be in the house for those amounts of time.

Please call me or follow this link for a quick quote, or a more personalized quote. http://www.mychartermtg.com thanks, Jeff Hutchison Senior Loan Officer 678-239-4652

Rates are not out today yet but you would be in the same as below. My suggestion to you would be touse the extra 5% that you are thinking and pay off some of your debt to try and raise your fico score after all this will save you a lot of money over 30 years of interest. Please feel free to call or e mail privately for any other questions.

Melissa Antenucci

Dear Mellisa, actually my middle score was 675 but it seems that the bank that gave my pre-approval got a lower number in their system. What are your rates for this middle score and also in case I put 25% down? Thank you!

HI Kristina,
On a primary SFH with a 651 fico and 20% down you would be at 5.375% on a 30 day lock based on today's rates on a 30 year fixed with no points and no PMI. Please feel free to give me a call or send me an e mail and I would be glad to offer your references. My office is in Society Hill but I am sure as you can see I go back and forth to Boca Raton.

Melissa Antenucci
Americrest Mortgage
FL Office 561-417-9221
Philly Office 215-621-9942

Kristina,

Even though you'll have to pay PMI on an FHA loan, you will get a significantly lower rate than a conventional mortgage due to teh 651 credit score. Remember, FHA mortgage rates are not set by the government, but individual lenders themselves. First and foremost though, finding a reputable lender that you can trust should be your highest priority. In all probability, a mortgage loan is the biggest investment you’ll ever undertake. You shouldn’t just trust anyone with that responsibility.

Even though a low mortgage rate is vital, you need a reputable lender working with you.

I hope this information helps. Best of luck!

Regards,
Total Mortgage Services

It is a single family property semi detached house. 245K, put 20% down, loan 196K. Thank you for help!

HI Kristina,
I am trying to look up pricing and the main issue I dont see is if it is a condo- high or low or a town house. Please let me know.

Melissa Antenucci
Ameritrust Mortgage
561-716-0792

Compare the principal + interest payment for 30 year fixed vs the principal+interest+PMI payment for FHA. Good Hunting!

The Wells fargo CDMP typically runs .50% higher in interest than Conventional but is less costly with your lower credit score thatn the "hits" you might see using conventional financing. My office is in West Chester and I also work out of our Rosemont office, which is closer to Philly. Let me know how else I can help you. http://www.ronbeebe.com

I missed the middle part- we are in Philadelphia, PA.

Hi Ron,

how is the Wells Fargo CDMP considering the interest rate? Is it higher than the FHA or conventional 30 year? Also, I want to put 20% down to have more equity in the house and to avoid financing so much.

Hi Kristina-
I have a program offered directly through Wells Fargo called the CDMP (Community Development Mortgage Product) that has similar terms to FHA in the it has lower down payment requirements but NO mortgage insurance. It is tied to the "median income limits" for your county so it would require specific income parameters from you. If you did not meet those parameters, FHA or conventional would then be your best bet, in that order.

Hi, Kristina,

It is all about the monthly payment differences. Calculate your principal and interest for the conventional loan. Then do the same for the FHA loan and include the PMI. If you are staying in your home for more than 5 years, it may be better to do the FHA, and then have a lower payment when the PMI is gone. If you email me your loan amount I will do the calculations for you.

Good luck

Carol Murray Cei
ReMax Millennium
carolcei@remax.net
215-643-9661

I would go conventional: you should be around 5.5% with 1 pt with no PMI conventional. FHA at 5% with no pts., and .55 monthly mi and a financed 1.75% MIP is a little more costly.

Fortunately, 5.5% is still a pretty good rate relatively speaking. Fell free t contact me directly for more information.