I thought FHA interest rates were suppose to be cheaper than conventional rates.

Discussion in 'Archived Threads 2001-2004' started by Drew Bethel, Sep 25, 2002.

  1. Drew Bethel

    Drew Bethel Screenwriter

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    I checked www.bankrate.com for MN and was surprised to find 30 year FHA rates more than a half point higher. Is this for real?
     
  2. DonRoeber

    DonRoeber Screenwriter

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    Could be. I understood it that FHA mortages were easier to get for first time home buyers. Which is why I've got one [​IMG]
     
  3. Colin Dunn

    Colin Dunn Supporting Actor

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    FHA rates are often higher than rates on conventional mortgages, but you can get in with a lower down-payment than with a conventional.

    Conventional mortgages with
     
  4. Patrick Sun

    Patrick Sun Moderator
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    For conventional loans, it's more like 20%-22% equity/downpayment that is required to be rid of PMI.

    FHA loans allow you to get the loan with a downpayment of around 3% IIRC, instead of the conventional 5% downpayment for normal loans.

    Also FHA loan guidelines a bit more tedious/strict than conventional loan guidelines.
     
  5. Jose Arellano

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    FYI, you need mortgage insurance with both FHA and conventional loans, although FHA issues their own. If someone is paying $200 a month in mortgage insurance, someone is ripping you off. The most I've seen is $115, and it was a high dollar home, with a 95% loan. To make it go up into the $200 range, you'd have a scenario, I believe to where the borrower would be able to afford the down payment then to get a loan that big. There are conventional loans right now that'll be available for %500 down, and it is easier than FHA loans to qualify. The mortgage industry has changed alot since I first got in less than two years ago, and it is easy to get a loan unless your credit is really bad or you are really overextended on your debt. Also, I believe fha mortgage insurance is deductible the first year as a sort of point type cost. I might be wrong on that one though. Email me with any questions, and I can help anyone in Texas if you are looking to buy or refi.
     
  6. Jim J

    Jim J Second Unit

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    Jose,
    What do you consider 'high dollar home'?

    That's my PMI payment. I had another mortgage on the table, where it was even higher (all other things being equal). This was a 95%ltv situation. I'm in NJ (metro NY)
     

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