I'm pretty much screwed. I'm stuck at 5%. I contacted Chase re: HEAP and they said I didn't qualify because they didn't do the origination on my laon, they purchased it through a different lender. And the fact that I went through the Rural Home Loan program, I have to find someone who does those loans to streamline the loan. I'll have to do more research. I keep getting mailings on refinancing, Quicken Loans seems to be pretty aggressive and mailing me stuff at least every 2 wks.
Yep exactly. Bought a house in the central valley through the USDA Rural Home Loan Program.
Just checked this site again and under assumptions they say 50% loan to value. :\Shopping around at the moment and the best I've found is 3.49% for a conventional 30 year with no points/origination.
These guys offer 3.125% but I don't know if there is any points/origination associated with that.
Anyone else shopping?
On a side note, I know this has probably been beaten to death, but rates have dropped. Going with a 30 year 3.5% FHA vs a 20% down 30 year, I haven't been able to find an advantage for the FHA option (unless you assume a high return on your left over cash). Circumstances my differ. I am assuming a $160k home value and at least a ten year time horizon for keeping the house. FHA assumes you pay MIP for 5 years.
I have excellent credit and only wanted to put 5% down, and I was never offered anything on the conventional side that would beat my FHA offer. Oh well. $3k worth of PMI rolled into the mortgage at these rates, I'll survive.FHA is great if you need it to get into the home you want due to having a weak file. however, borrowers with excellent credit can buy single family residences with only 5 percent down on a conventional loan with no monthly mortgage insurance.I am currently refinancing a few people who did not know this and put 10 percent down and are paying monthly mortgage insurance. I am completely removing it for them.
there is almost never an advantage of going with FHA over conventional unless you are doing a low LTV 15 year fixed, because the mortgage insurance isn't nearly as bad as it is with a 3.5 percent down 30 year fixed loan. and also they keep on raising the FHA fees and monthly MI.
FHA is great if you need it to get into the home you want due to having a weak file. however, borrowers with excellent credit can buy single family residences with only 5 percent down on a conventional loan with no monthly mortgage insurance.I am currently refinancing a few people who did not know this and put 10 percent down and are paying monthly mortgage insurance. I am completely removing it for them.
Isn't the FHA loan really meant for people with only 3.5% to put down? I don't know much about it, but within my limited research I've gathered that if you CAN afford more to put down then you wouldn't bother with FHA.
It isn't only for the 3.5% down (meaning you don't have a lot of cash up-front). It also allows a weaker credit profile, and a higher debt-to-income ration than Conventional.
Although the FHA MI is becoming so obscene in my area due to the average loan size, (1.75% up-front, 1.25% annually), I am pushing anyone who qualifies towards conventional.
Also, FHA is talking about never allowing the MI to "fall off", meaning it will be on the loan for life.
I have excellent credit and only wanted to put 5% down, and I was never offered anything on the conventional side that would beat my FHA offer. Oh well. $3k worth of PMI rolled into the mortgage at these rates, I'll survive.
So refreshing to see that subprime lending is still going well.
hehe
FHA is a tax-payer subsidized sub-prime lending, but unlike those sub-prime loans of the 2000s, everything is verified (pay-stubs, tax returns, etc) to make sure they can make the payments. Also most of them are fixed-term loans. Also the borrower pays to help insure against forclosure losses to the investors of the loan.
It's pretty messed up, especially after everything that happened.
Not one person ended up in jail and sub prime lending continues.
Heck, just the fact that they are giving out loans to people that can't really afford a house is REALLY messed up (by people that can't afford it I mean, anyone that doesn't have 20% downpayment).
Market is STILL very sketchy and it can turn down AGAIN. Those that have 5% equity or even 10% will be screwed. But to be honest, they shouldn't be buying a house in the first place.
Like I always say. Just because you CAN or bank is willing to borrow, doesn't mean you SHOULD.
I eagerly await myself getting "screwed." :whiste:It's pretty messed up, especially after everything that happened.
Not one person ended up in jail and sub prime lending continues.
Heck, just the fact that they are giving out loans to people that can't really afford a house is REALLY messed up (by people that can't afford it I mean, anyone that doesn't have 20% downpayment).
Market is STILL very sketchy and it can turn down AGAIN. Those that have 5% equity or even 10% will be screwed. But to be honest, they shouldn't be buying a house in the first place.
Like I always say. Just because you CAN or bank is willing to borrow, doesn't mean you SHOULD.
Your definition of not being able to afford the house is from the 1920s. The current pool of FHA loans being originated right now is very strong, because we confrim they CAN afford the monthly payment.
How are you screwed if you have 5% or 10% equity? This shows a lack of knowledge on your part more than the people who make underwriting guidelines for FHA and Conventional loans, which are insured against the risk of the lower equity.
Your house doesn't magically get taken from you just because you have no equity. You are only up-side down if you try to sell. There are millions of people who put 20% down and due to the burst, have negative equity. Yet they have continued to make their payments on time.
The financing crash happened because income was not verified, there was no mortgage insurance, the economy went bad in general so people lost their jobs, (which could happen to anyone), and the loans were terrible. They would allow me to qualify you off of a teaser rate that was only going to be that way for the first 2 years, and then it would jump up to something that you CAN'T AFFORD. If you had a pulse and a valid SSN with a 580 FICO, I could have gotten you a 100% LTV single loan with no MI and on a 40 year term. Yuck.
Now, if you do a 5 year fixed ARM, they base your qualification on a higher rate, as if it has adjusted upwards already.
I eagerly await myself getting "screwed." :whiste:
You know nothing about my personal financial situation.Time will tell. Hope your employment situation is reliable.
You know nothing about my personal financial situation.
If something happens you have no equity and most likely will have to PAY to sell the house and move. It's not lack of knowledge, it's called being SMART and not taking risk and putting yourself in a bad situation with high risk.
You know nothing about my personal financial situation.
We close 2/28. Locked in early January.
I'm not concerned about it or anything, as I'm pretty thrilled with the deal I got. Just curious.
If something happens and you have to get rid of the house in a hurry, you're going to get screwed on the sale price anyway, and it's BETTER to have no equity so that the bank takes the haircut instead of you. Plenty of "smart people" who put 20% down ended up worse off than the people who put 0% down, once the market crashed and they both owed more than the house was worth.
I agree about the emergency fund, but not necessarily about the 20% down...although I DID put 20% down when I bought.
He's fun to fuck with. He's like Texashiker lite.dude don't even bother. he is 100% stuck in his ways and nothing you can say will come close to changing his mind. he thinks everyone has to live by his rules and if you don't, then you are doing it wrong. i know this from his posts in multiple threads.
1920s ehh? You sound like a Mortgage broker.
Just because someone CAN afford it doesn't mean they should buy the house or are ready.
Do they have 6-9 month emergency fund?
Both that and 20% makes mortgage a lower risk situation FOR THE BUYER. And it's a guideline that should be follow to PROTECT YOURSELF.
If you have 5% down payment and you lose your job, you WILL lose money when you sell the house (in this market).
Think of 20% as a "security measure" or an investment. It's not money that you are spending or losing. But it important to have that money to give yourself some room in case things hit the fan.