I would add a couple points to Robert C's response:
1. Look at your cash reserves. If you don't have a lot in reserves, go with 5% down vs. 7%. It won't change your payment much and you will have the security of cash should an emergency arise. Also, for loan amounts over $417,000 you will need 5% down for FHA.
2. FHA is a great loan in today's market because it is an assumable loan. Rates are at all time lows, and if you believe rates will be higher when you sell, it makes sense to have a loan that you can sell with your house. Your low rate assumable loan will make your home much more attractive than the competition at time of sale.
3. You won't find reasonable financing for the $25k shortage to make your first $417k. The difference in rate is minimal anyway.
4. Very important if you don't have a lot of cash: write the purchase offer with the seller paying your closing costs. FHA will allow up to 6% of the sales price to be credited by the seller for your closing costs. If you can negotiate the contract in this way, you will be in a much better position to preserve capital, as your only out of pocket will be the 5% down.
Good luck to you!
Yes with 5% down you can do a conventional loan vs. an FHA loan. With a conventional loan your mortgage insurance will all be monthly vs. FHA where some of the MI is "up front MI" and added to the loan balance and some is included monthly. The interest rates are fairly comparable between FHA and conventional. The amount of mortgage insurance you pay would be based on how long you held the loan. Over a longer period you may pay less with FHA. If you put 10% down your mortgage insurance would be less.
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