Financing in La Jolla>Question Details

Miyuki Hoshi…,  in La Jolla, CA

Is the interest rate on homepath financing higher than conventional and/or FHA?

Asked by Miyuki Hoshina Flavell, La Jolla, CA Fri Oct 14, 2011

I heard from someone that the interest rate on homepath financing is typically higher than conventional 30 year fixed and/or FHA? Is this true? If so, how much higher?

Help the community by answering this question:

Answers

7
Home Path Owner Occupied - 5.25% with 2.75% points, FHA 4.127% with 1.0% points. The answers is yes you are paying a premium to avoid the monthly MI and appraisal. If the property condition is an issue then Home Path may be your only option. Other loan programs will require an appraisal and that the property meet basic health and safety standards. Good Luck
1 vote Thank Flag Link Fri Oct 14, 2011
Hello Miyuki,

All the points listed below are great to know when comparing FHA to Homepath. I wanted to point out one additional item. Even if you're shying away from the Homepath loan because it's 1% higher in rate, take into consideration that if you happen to have an accepted offer where the seller gives you a large credit towards closing costs, you could apply those funds to buy down the interest rate. Now, you're in a situation where you are going as low as 3% down with an interest rate that is possibly in the 4% range. Not a bad deal when you're not financing the UFMIP and the monthly MI with FHA loans and you're now at a rate that is comparable to FHA rates.

Best of luck to you.

Michael Abram
First Capital Mortgage
NMLS #235060
Direct: (310) 434-1718
Cell: (310) 995-0975
mabram@firstcapitalmtg.com
http://www.firstcapitalmtg.com/mabram
0 votes Thank Flag Link Sun Oct 16, 2011
The rate difference between a Homepath and a standard FHA is approximately 1%. So if the prevailing rate for an FHA is 4.250% for a 96.5% LTV loan, you can expect to get around 5.250%. There are other factors that could make your rate higher i.e. (condo, credit score, area). The FNMA Homepath has built in or lender paid MI which for all intense purposes is the equivalent to an FHA given the fact that with an FHA you have 1.15% MMI. Dollar for dollar, the FHA in my opinion has more benefits later down the line i.e. Streamline Rate Reduction, possible forbearance (if you run into financial trouble later on), and the fact that an FHA loan is still assumable while a FNMA is not. Both have of course have pros and cons. For further information you can click on the link below.

Best of luck!
0 votes Thank Flag Link Sat Oct 15, 2011
Hi,

The important thing to do is to contact a HomePath lender and do a side by side comparison:

HomePath with no Mortgage Insurance

FHA with Mortgage Insurance

Also, FANNIE MAE offers the program so they like to take sales that have HomePath loans.

Hope this helps,

Mark & Kari Shea
Shea Real Estate
0 votes Thank Flag Link Fri Oct 14, 2011
I am not a lender however in my experience working with buyers the rates come in higher. But, depending on the situation, homepath properties can be a great option, especially condo's because FHA financing might not apply.

Although from my understanding the credit guidelines are more strict than FHA and some clients might not qualify...
0 votes Thank Flag Link Fri Oct 14, 2011
It depends on the loan to value.

Realize this, though. There is no appraisal and there is no PMI. The over 80% LTV is higher in rate to compensate for the lack of the MI.

Also, you can get a 100% gift and up to a 6% contribution from the seller even up to the 97% LTV.

You can price the HP rates live at my website, usloans.com

Fred Glick
DRE Real Estate and Mortgage Broker
Web Reference: http://usloans.com
0 votes Thank Flag Link Fri Oct 14, 2011
The price hits for homepath are VERY extreme especially if you are trying to do the 97% financing.

If a property can be financed through FHA both the rate and fee's will be much less. Even though FHA has the monthly mortgage insurance.
0 votes Thank Flag Link Fri Oct 14, 2011
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer