Question Details

karianna819, Other/Just Looking in Fontana, CA

conventional loan and CHDAP combined or FHA? Which is best?

Asked by karianna819, Fontana, CA Tue Feb 5, 2013

hi, i am extremely worried and stressed because my spouse and i have just started the process of purchasing our new home, however.. i am very skeptical about conventional loan PLUS the chdap loan (combined) versus the FHA loan. what is the great difference? and what is recommended? honestly, to me the conventional plus CHDAP program seem shady to me and I think it is because i am not educated in this process. can someone please shed some light here, i am losing sleep over this thinking that maybe we are not making the correct decision by going with conventional and chdap. HELP! oh and we met with out realtor and loan officer on saturday to get this whole process started and up to this point we are going with the conventional loan and chdap for the down payment... i am not sure if we are making the correct decision. I guess i just dont want any surprises in the long run.

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I would suggest that you contact a local mortgage banker/broker. My corporate office is located in California if you'd like a few names emailed to you from me. I happened to come across your post and thought I'd send a quick note. If you go conventional and have enough funds from the CHDAP program for a down payment large enough to qualify without private mortgage insurance, that would be the way to go. If it's not enough and you'd still have to pay mortgage insurance, I'd bet it's a tight race between the two programs. FHA, you'll have upfront mortgage insurance (added to the top of the loan amount) PLUS you'd have to pay monthly mortgage insurance. Both of those (going conventional) would be less than the mortgage insurance you'd have to pay going FHA. However, the rates for FHA would be better than a conventional loan above 80% loan to value. PLUS with the down payment assistance program, they usually put stipulations on the money they'll give you. For example, a $10k gift is done with a forgivable grant/lien against the property. Then so long as you live in the home for 5 years you won't have to pay these funds back. You'll want to get and keep all the documentation you receive so that you can be sure after the 5 year mark you can get that lien removed. I'm not sure if I'e covered all of your concerns. Again, I can provide you names if you'd like to get a second opinion (from someone licensed in your State) as I'm only licensed in the State of Ohio at the moment. Best wishes to you in your purchase! I hope I've been somewhat helpful. Regards, Best to you, Kimberly Lawson Mortgage Loan Originator First Priority Financial, Inc.
"Where Open Minds Close More Home Loans" 748 N. Court Street, Suite 201 Medina, OH 44256
Phone/Fax: 888-659-3848 Licensed by Ohio Division of Financial Institutions, MB.850147.001
Ohio Loan Officer License: LO.4495.000 NMLS: 5601
0 votes Thank Flag Link Wed Feb 6, 2013
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