We squeaked in under the PMI rule change, so ours will go away at 20% equity, and honestly the PMI did not add that much to the total, particularly when compared to the total cost life of loan for the other options on the table. If the PMI was permanent, it might well be a different story. It may well be our unique situations (credit scores were fair but not fantastic, but debt to income was excellent) that the non-FHA loans ended up not being net advantageous. It may well be that if we were in the >750 score range it would have shaken out differently.
This does speak well, though, to the value of a good mortgage broker. She or he should be able to present you with true total cost comparisons, which can be a pain to figure out on your own.
I used a mortgage broker after my first lender fell through, and the experience was great. I guess mortgage brokers get better deals, because I got a really low rate and got the lender to assume the PMI (at the cost of a slightly higher rate).
Unalienable rights are truths which apply to all men, regardless of nationality:
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."
The slickest deal is nothing. Buy nothing. Need nothing.
If this is your first time, you might see what FHA fixed options are available to you out there. We closed in January on our first home and scored a 3.25% apr fixed 30 yr assumable FHA with 3% down, closing costs bundled in. Fees were a little higher, but bundled in at 3.25% this was a net win for us, given that we can make much better use of the extra funds that would have gone into the downpayment.
As first time buyers, we also took advantage of a well-recommended local mortgage broker who reduced the headache for us by leaps and bounds. He took our financials and did all the rest, gathering comparisons, crunching out the numbers on them (whats the real total cost of the loan), and even came to the closing and sat through the whole thing with us and our real estate agent to be sure it all went smoothly. As a result, we save a ton of time and frustration. I might have saved some money doing all the loan stuff myself (or using a discount real estate agent) but we were happy to pay for the peace of mind and enormous amount of time saved by using an exception real estate agent and mortgage broker.
Our income to debt ratio was excellent (we were approved for three times what we spent) but the cost of homes here in the south east is ridiculously low, unlike out there in the bay area, so things may shake out very differently for you.
Given how low rates have been I really cannot recommend an ARM.
At 3.25-3.5%, I can make a profit investing what I borrow with only minimal risk, especially over a 10 year or longer period. The only reason I would make a larger downpayment would be to have home equity available to use for auto purchases or other large purchases on the horizon (so that I can deduct the interest from the home equity loan, which I cannot do with an auto loan).
You pay PMI. It looks like he has 20% down so he will not. Going fha, if he qualifies for, is taking a step back.
Agree. No ARM. That would be dumb.
I got rates from wells fargo at 4.625...i then found a local savings bank on friday and was able to secure a 4.25 and signed the paperwork at that point. search around, it worked for me.
That does no good unless you compare points, fees and all. I can get a sub 3 if I pay the points. The entire fee structure matters not just the rate.
Last edited by saladdin; 08-19-2013 at 11:17 AM..
Reason: Automerged Doublepost
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