Home Buying in Weehawken>Question Details

Kenny, Home Buyer in Jersey City, NJ

FHA Loan or conventional loan which is better? Where can I find some good FHA approved properties?

Asked by Kenny, Jersey City, NJ Tue Feb 23, 2010

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Hi Kenny. If you can do conventional I would have to argue that conventional is better. Although you can save your down payment with FHA, you will pay extra for that FHA loan. Also, something to know, some lenders are incentivized to write FHA loans believe it or not, even if you qualify for a conventional. This recently happened to a buyer of mine who is in contract with me, and we ended referring her to my mortgage broker and he has her in a conventional loan and she is saving money, although the first rep told her differently but was hiding fees.
In addition, the other arguement with why conventional is better, is that you won't be limited as to what properties you can buy. There are very few FHA approved buildings, and even less in Weehawken (where your questions is asked).
You can search on the link that Walter provided.

Kenny, I would recommend that you hire a buyer's agent to help you through this process. They will help identify properties for you as well as inform you on market conditions and can offer mortgage advice.

Best of luck.
Karina Anillo
RE/MAX Gold Coast Realty
56 Newark Street
Hoboken, NJ 07030
P (201) 795-5200 xt 332
0 votes Thank Flag Link Tue Feb 23, 2010
Here is a reference that compares FHA benefits to conventional loans: http://massrealestatenews.com/fha-loans-v-s-a-conventional-loan/
0 votes Thank Flag Link Sat Sep 24, 2011
In general, you are better off with a conventional loan because with an FHA loan you are automatically subject to paying an upfront fee of 1.75% (soon to be 2.25%) of the loan amount plus monthly mortgage insurance for a minimum of five years.

However, it would really depend on your specific situation because often you would come out ahead with an FHA loan.

As an example, if you wanted to put down 10% on a condo, you would probably be better off with an FHA loan.

Depending on your credit, you may not even be eligible for a conventional loan.

It all depends on your specific scenario and part of the job of a loan officer is helping the client decide which route to take when the case is borderline.

Good luck.
0 votes Thank Flag Link Tue Feb 23, 2010
Kenny - In general, most properties are approved for FHA loans. More recently you may find more issues purchasing a condo using an FHA loan. You may well know that FHA loans do have dollar amount limits per county.

In general a conventional loan is better if you have 740+ credit scores and can put a good down payment down, say 10 or 20%. Otherwise more and more these days FHA wins the race with buyers who have credit scores less then 700 and buyers that are putting little money down.

Some people get tied up with getting the perfect loan, bent on getting a conventional loan versus an FHA loan for instance. Just have your loan officer do a comparison for you to see what is better. It isn't hard to do. Sometimes 1 point in credit score can be a huge difference in payment/rate/costs and options.

I hope this helps a little. The topic is broad and could be discussed for weeks.
Web Reference: http://njmortgageblog.com
0 votes Thank Flag Link Tue Feb 23, 2010
Kenny,

You can search for the FHA approved properties on http://www.hud.gov.

Since Weehawken does not have many condominium buildings, the options for FHA approved buildings may be limited.

Please let me know if you have any additional questions. I'll be happy to assist.

Sincerely,


--
Walter J. Burns
Realtor-Associate
Weichert Realtors
Hoboken, NJ
201-653-8488 Ext: 230
201-694-8946 Mobile
http://www.livingonthehudson.com
0 votes Thank Flag Link Tue Feb 23, 2010
Most owner occupied properties will be FHA eligible. The exception is multi-dwelling units (condos, apmts) where the percentage of owner occupied vs investor comes in to play.

There are different FHA programs depending on the property and your financial situation. Speak with a lender about what you are trying to accomplish. They will help you find the best program.
0 votes Thank Flag Link Tue Feb 23, 2010
While there had been a time when FHA had to approve certain properties, such as condominums, that's all part of the loan process now. You can purchase a single family detached home, condominium or 2-4 family home with an FHA mortgage as long as your income and credit qualify you.

If you're referring to FHA-owned homes - properties that had FHA loans and were foreclosed, there are lists of those I can help you with.

Both FHA and conventional (Fannie Mae or Freddie Mac) are good choices, depending on your situation. If you have money to put down and have great credit, conventional might be a good choice. Feel free to chat with me and we can go over some figures to see what makes the most sense for you.

Tom
Eagle Nationwide Mortgage Company, a subsidiary of Eagle National Bank
0 votes Thank Flag Link Tue Feb 23, 2010
Majority of the homes are FHA approved. It depends on short and long term goals, % of down payment.

Best have mortgage broker provide you all details for amount you would pay and interest rates.

CPA is another option for your tax benefits of 2 different types of loans.

Lynn911
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Tue Feb 23, 2010
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