Home Buying in Harlem>Question Details

Pbrownie, Home Buyer in Harlem, GA

I have a high credit score (770) No debt and100k down if I stretch. I love a 600k condo. Should I do an FHA loan so I can put less?

Asked by Pbrownie, Harlem, GA Sat Feb 5, 2011

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Pbrownie,

It is true you will need to confirm that the condo is eligible for an FHA loan. However , I suggest you look carefully at all of the costs associated with the FHA loan. If there is a way to do a conventional loan with 20% down and you do a direct comparison of up-front and long term costs you too will see the benefits of the conventional loan. Condo financing is still difficult but more programs are opening up. The Mortgage Premium Insurance (MPD) on the FHA will alone should be enough to scare you. If you have to lower the cost of he home you are purchasing it might make sense.

If you have the ability to, put down the 20%.



Always at Your Service,


Tom Priester e-PRO
"Results Driven Real Estate"

Keller Williams Realty
561 308-0175
tom@tompriester.com
Web Reference: http://www.tompriester.com
1 vote Thank Flag Link Sun Feb 6, 2011
Please contact me for assistance. My name is John and I can be reached at 212-714-1027 ext 11. Thank you and good luck!
0 votes Thank Flag Link Wed Aug 8, 2012
The agents below are correct: these days the building needs to be FHA approved in order for you to secure an FHA loan for it. From a personal finance standpoint, you may want to ask yourself: would I rather pay more for this property over the long haul and put down less cash, or is the total (after-interest) cost of the property the number one concern? Answering that question may be help you figure out if FHA is the way to go.
0 votes Thank Flag Link Sun Feb 6, 2011
Your best option is a 10% down conventional loan. Assuming your income is sufficient, this loan is easier to obtain. When your loan balance is 78% of the original loan amount, the PMI goes away.

With an FHA loan, there is no way to stop paying PMI. You'll have to pay the costs associated with a refinance or pay PMI until you sell.

Best wishes,
Chris
0 votes Thank Flag Link Sun Feb 6, 2011
Has the condo been FHA approved? If you can not afford 20% down FHA is the way to go. As a Harlem broker I have a number of condo homes available for you to view some with 421-A tax abatements. Are you a first time home buyer? Programs in the area offer classes and grants for first time home buyers that do not have to be paid back. Take advantage of all that is offered by Operation Hope. Good luck.
0 votes Thank Flag Link Sun Feb 6, 2011
All good points below! Making sure the Condo is FHA Approved is the key! If in fact it is you can put down ANY amount with a minimum of 3 1/2%. It is a great loan for several reasons(government insured, assumable mortgage). In summary put down an amount you can afford to pay and be comfortable with the monthly payment. There are other types of loans available as well and if you need a referral to a knowledgable Mortgage Broker just let me know! Regards Allan
0 votes Thank Flag Link Sat Feb 5, 2011
If you haven't done so, consult with any qualified loan officer, he/she can best advise based on your overall finances....
0 votes Thank Flag Link Sat Feb 5, 2011
Ask your lender to give you an amortized schedule of how much this home will cost you in the end based on whatever amount of years you intend to pay - 15, 30 et cetera. You will be quite surprised at what you will actually be paying for that home in the end.

Another way to view this is with your accountant. Depending on your age and complete financial picture, it may be wise to put less down and use the rest to invest in a different form.

You should also make sure that whatever your decision on the down payment that you can comfortably afford those payments and have a cushion to fall back on in the event you lose your job or become ill or incapacitated. As you can see, there are many variables that come in to play here, so it would not be in your best interest for us to advise you to the extent that you may need advice.
Web Reference: http://www.lindacefalu.com
0 votes Thank Flag Link Sat Feb 5, 2011
For a condo to be eligible for an FHA loan, the developer needs to have applied and be approved for that status, so first check if that is even the case. Then speak with a lender and look at what your different payments would be putting down various amounts and see what monthly debt to income ratio works best for you.
0 votes Thank Flag Link Sat Feb 5, 2011
If you put less, your payments will be higher. Please speak about this with a mortgage broker. If you don't have one to advise you, I will be happy to give you a referral. Contact me at Gail@gailgladstone.com.
Web Reference: http://Gailgladstone.com
0 votes Thank Flag Link Sat Feb 5, 2011
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