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FHA Mortgage Loan
Old 12-21-2014, 08:09 PM   #1
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FHA Mortgage Loan

Does anyone have one and what is the process of getting one? Was attracted by the 3.5% downpayment requirement. How do I find a good lender? I used Penfed for my last mortgage but they do not offer FHA loans and I think the downpayment requirements are much higher.
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Old 12-21-2014, 08:41 PM   #2
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Most banks and any mortgage broker can get you one. The problem with a 3.5% down payment is you will have to pay MIP. It can be a significant monthly amount. Depending on your loan size and terms, it could be as high as a 1.35% payment spread out over 12 months.

On a $200K loan, that's an extra ~$225 a month. And you also pay a premium at closing.

Get a VA loan if you can.
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Old 12-21-2014, 08:52 PM   #3
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Thx for the input. Are there extra fees permanent for the life of the mortgage or do they fall off after I have paid a certain amount of the principal?
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Old 12-21-2014, 09:00 PM   #4
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Thx for the input. Are there extra fees permanent for the life of the mortgage or do they fall off after I have paid a certain amount of the principal?
It depends... You can always refinance and get rid of it.

At 3.5% down payment on a 30 year loan, I believe they are permanent. It used to be that once you got below ~80% LTV, they went away.
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Old 12-22-2014, 02:41 PM   #5
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Thx for the input. Are there extra fees permanent for the life of the mortgage or do they fall off after I have paid a certain amount of the principal?
I thought they went away when you had built up 20% equity but it has been quite a while since I had one of those loans. It may have changed by now.
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Old 12-22-2014, 06:24 PM   #6
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I thought they went away when you had built up 20% equity but it has been quite a while since I had one of those loans. It may have changed by now.
It has changed.

For a > 15 year loan, with less than 90% LTV, you pay MIP for the life of the loan.

The least you pay, on any loan, even one with less than 78% LTV, is 11 years. Put 22% down, pay MIP for 11 years. Plus the initial mortgage premium at closing.


FHA Requirements: Mortgage Insurance
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Old 12-23-2014, 11:18 AM   #7
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FHA inspectors can kill deals too
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