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Started By
Message
Anybody done an FHA loan?
Posted on 12/8/18 at 10:49 pm
Posted on 12/8/18 at 10:49 pm
Hey baws, I’m a regular on the rant and other boards but this may be my first post here.
Anyways, me and Mrs Frac live in Colorado, yes, we’ll take your prayers. She’s a native so we’re here to stay.
We’re lookin to buy our first house. It’s taken longer than normal cause prices out here are quadruple if not higher than in the south. I’m nervous, cause I don’t know what I’m doing and also because of the big price with the little house you get.
We found a house we like and we want to make a move, but we have 6 months left on our lease.
My questions are this:
How long is the average time until you actually pay your first mortgage? I’ve been told the average this time of year may be like March, that true?
2nd, how many different lenders do you check around with to check on interest rates?
3rd, would it be better to hop into a hot market now or wait until it’s closer to our lease is up? We found a great place we’re interested in but the question is how long it will take to close because we cant afford a mortgage and a months rent at our apartment for 6 months. Does it take that long to close where we’ll only have a month or so of rent left to pay?
Are we being impulsive and should wait? We can only afford a 300K or less house which in Colorado is rare and interest rates are only going to go up. This place we’ll offer 270K and cross our fingers. I feel like we should lock it in while we can but any guidance would be great
Anyways, me and Mrs Frac live in Colorado, yes, we’ll take your prayers. She’s a native so we’re here to stay.
We’re lookin to buy our first house. It’s taken longer than normal cause prices out here are quadruple if not higher than in the south. I’m nervous, cause I don’t know what I’m doing and also because of the big price with the little house you get.
We found a house we like and we want to make a move, but we have 6 months left on our lease.
My questions are this:
How long is the average time until you actually pay your first mortgage? I’ve been told the average this time of year may be like March, that true?
2nd, how many different lenders do you check around with to check on interest rates?
3rd, would it be better to hop into a hot market now or wait until it’s closer to our lease is up? We found a great place we’re interested in but the question is how long it will take to close because we cant afford a mortgage and a months rent at our apartment for 6 months. Does it take that long to close where we’ll only have a month or so of rent left to pay?
Are we being impulsive and should wait? We can only afford a 300K or less house which in Colorado is rare and interest rates are only going to go up. This place we’ll offer 270K and cross our fingers. I feel like we should lock it in while we can but any guidance would be great
7
Posted on 12/9/18 at 7:19 am to Frac the world
Your first payment will generally be due the 1st of the month skipping one full month. So if you got a loan in DEC, your first payment wouldn’t be until Feb 1st.
I personally would wait a little closer to when you lease is up to try and make offers on houses. If you think this is a really good deal, then you could make an offer but put close within 60 days on the purchase agreement. That would give you two months before closing and your first payment wouldn’t be due until April 1.
I personally would wait a little closer to when you lease is up to try and make offers on houses. If you think this is a really good deal, then you could make an offer but put close within 60 days on the purchase agreement. That would give you two months before closing and your first payment wouldn’t be due until April 1.
Posted on 12/9/18 at 8:29 am to Frac the world
You'll get to skip one month before you start paying your mortgage. You can set a closing date in your offer to purchase the house. The down side is that a seller in a hot market likely won't accept an offer with a closing date 5 months out.
Be extremely cautious buying real estate in a hot market. There is pressure to get in before it gets even more expensive. I felt that pressure in 2005 when I bought my first house in Orlando. Family circumstances forced us to move in 2008. My house sat on the market for almost 2 years and I had to take out a loan and empty my savings account to pay off my mortgage at closing when I finally sold it for a significant loss.
Be extremely cautious buying real estate in a hot market. There is pressure to get in before it gets even more expensive. I felt that pressure in 2005 when I bought my first house in Orlando. Family circumstances forced us to move in 2008. My house sat on the market for almost 2 years and I had to take out a loan and empty my savings account to pay off my mortgage at closing when I finally sold it for a significant loss.
Posted on 12/9/18 at 9:28 am to Frac the world
quote:
How long is the average time until you actually pay your first mortgage?
That's not a good way to start a 30 yr mortgage.
Posted on 12/10/18 at 11:38 am to Frac the world
quote:
How long is the average time until you actually pay your first mortgage? I’ve been told the average this time of year may be like March, that true?
March would probably be accurate right now since if you put an offer in today, you're closing date would probably be mid January if everything goes smoothly with your loan and no issues on inspections. If you could push the closing into early February, then your first payment would be due April 1.
Posted on 12/10/18 at 12:01 pm to Frac the world
You won't like my answer but here goes...
FHA is for people on the cusp of being qualified to actually buy a house. Many would say if you are on the cusp, you probably shouldn't.
Agree with other poster who said "When is my first payment"... my first thought was 'That's a question someone asks who isn't ready to buy a house".
People feel like they have to buy a house to start a family but that's just what the business wants you to think. Nothing wrong with renting with kids. Get more money saved up, more debts paid off, and go into your purchase already knowing what you want/need instead of anticipating what you want/need.
FHA is for people on the cusp of being qualified to actually buy a house. Many would say if you are on the cusp, you probably shouldn't.
Agree with other poster who said "When is my first payment"... my first thought was 'That's a question someone asks who isn't ready to buy a house".
People feel like they have to buy a house to start a family but that's just what the business wants you to think. Nothing wrong with renting with kids. Get more money saved up, more debts paid off, and go into your purchase already knowing what you want/need instead of anticipating what you want/need.
Posted on 12/10/18 at 12:10 pm to Frac the world
Typically takes between 30-45 days from when the contract is signed to close if you are obtaining financing. This is reliant upon how the inspections, appraisal, and your bank/broker you work with. First payment will be following the first full month after you close.
Your credit should be the main factor in deciding whether or not you go FHA loan or conventional. Both loan programs are good, but FHA will be more beneficial if you have a low credit. The conventional will be the better route for you to go if you have a high credit score. (this is based on mortgage insurance rates assuming you are putting less than 20% down.)
Your credit should be the main factor in deciding whether or not you go FHA loan or conventional. Both loan programs are good, but FHA will be more beneficial if you have a low credit. The conventional will be the better route for you to go if you have a high credit score. (this is based on mortgage insurance rates assuming you are putting less than 20% down.)
Posted on 12/10/18 at 12:56 pm to HYDRebs
quote:
Your credit should be the main factor in deciding whether or not you go FHA loan or conventional. Both loan programs are good, but FHA will be more beneficial if you have a low credit. The conventional will be the better route for you to go if you have a high credit score. (this is based on mortgage insurance rates assuming you are putting less than 20% down.)
Agree, and you can still get a low down payment with conventional.
There is a Conventional 97 that lets you only put 3% down (just like FHA) and has better rates and lower PMI than FHA - but your credit score and income ratio needs to be better.
Also, I have heard from RE agents that preapprovals from FHA are put in the back of the pile when an offer comes in. They have a lower rate of actually closing once the deal goes into underwriting. Basically dealing with people on the cusp.
This post was edited on 12/10/18 at 12:59 pm
Posted on 12/10/18 at 1:01 pm to deeprig9
agree with others re FHA. I had one for my first home before the lifetime MIP change a couple years ago. It was just wasting a couple hundred bucks a month. I lucked out and sold my house without taking a loss, but i essentially rented for 3 years when it was all done.
I think you'd be better off waiting until end of your lease term and going month to month (even if there were a small penalty) to find the house.
Also, Colorado is awesome. screw the haters
I think you'd be better off waiting until end of your lease term and going month to month (even if there were a small penalty) to find the house.
Also, Colorado is awesome. screw the haters
Posted on 12/11/18 at 7:19 am to deeprig9
Also , didnt they change PMI recently . Its now paid monthly the duration of the loan instead of the first 10 years . Is so , what a scam . Could be wrong that info came from the wife .
This post was edited on 12/11/18 at 7:20 am
Posted on 12/11/18 at 9:20 am to DreauxB2015
Gone over this on several other threads, but if putting less than 5% down FHA PMI is .85% of loan balance readjusted yearly for the life of the loan. If putting 5% or more down it is .80%. If you put 10% or more down it is the .80% PMI plus it automatically gets dropped off after your 11th year of the loan.
Whereas Conventional PMI can be anywhere from .2% to 1.6% depending on down payment and credit scores. It is based off your original balance and does not decrease yearly like the FHA. However, you can get it to drop off at 80% Loan to Value or automatically drops off at 78%. It is required you pay it on time for at least 2 years though.
Both have its pros and cons, but essentially good credit score go conventional marginal credit score go FHA if available.
Whereas Conventional PMI can be anywhere from .2% to 1.6% depending on down payment and credit scores. It is based off your original balance and does not decrease yearly like the FHA. However, you can get it to drop off at 80% Loan to Value or automatically drops off at 78%. It is required you pay it on time for at least 2 years though.
Both have its pros and cons, but essentially good credit score go conventional marginal credit score go FHA if available.
Posted on 12/11/18 at 1:32 pm to Frac the world
We used FHA for our first loan. We were pretty much in your same shoes. It worked out for us, but the first few months were a little sketchy. We made it work fortunately.
If you really like this house, my advice is live as cautiously as you can and go for it. It is a risk though.
I don't know what the rules are, but you may be able to offer a little over asking price (if the appraisal supports the price) and ask for the money back at closing for allowance. Play the rules if you can. Ask your agent what options you have. FHA is more strict than conventional loans, so you may not be able to do anything here.
Another piece of advice. Something I didn't realize before buying a home but worked out for me anyways.
You're buying at a market peak by any estimates. You don't currently own property. If you let the market come down some (means being patient for another year, maybe two), you can buy in a low time, and the market will correct and you will actually make something on your house when you're ready to sell and move up.
When you already own a house, and look to move to the next house, you now have to deal with a decision to sell your house in a peak market, and buy the next house in a peak market. Or you have to sell your house in a low market and get less than it'll eventually be worth, but buy something at a lower value.
Buying your first house is your best opportunity to capitalize significantly on a fluctuating home market and the best way to do that is buying in a low market, which it currently is not a low market.
If you really like this house, my advice is live as cautiously as you can and go for it. It is a risk though.
I don't know what the rules are, but you may be able to offer a little over asking price (if the appraisal supports the price) and ask for the money back at closing for allowance. Play the rules if you can. Ask your agent what options you have. FHA is more strict than conventional loans, so you may not be able to do anything here.
Another piece of advice. Something I didn't realize before buying a home but worked out for me anyways.
You're buying at a market peak by any estimates. You don't currently own property. If you let the market come down some (means being patient for another year, maybe two), you can buy in a low time, and the market will correct and you will actually make something on your house when you're ready to sell and move up.
When you already own a house, and look to move to the next house, you now have to deal with a decision to sell your house in a peak market, and buy the next house in a peak market. Or you have to sell your house in a low market and get less than it'll eventually be worth, but buy something at a lower value.
Buying your first house is your best opportunity to capitalize significantly on a fluctuating home market and the best way to do that is buying in a low market, which it currently is not a low market.
Posted on 12/11/18 at 5:53 pm to WhiskeyThrottle
It’s a hot market for homes in Colorado for sure but don’t you think it’s dumb to try to time the market when in fact it could very well keep going up. The demand in Colorado is not slowing down and the impact of recent recessions did not greatly impact much of Colorado and certainly not to the extent it did in Florida or elsewhere.
Ultimately I’m saying that if you are in a place to buy a home and find one that suits your needs and ability to pay for then you should jump on it. The money you’re spending on rent for the time you wait for the market to potentially go down could be significant as well.
Ultimately I’m saying that if you are in a place to buy a home and find one that suits your needs and ability to pay for then you should jump on it. The money you’re spending on rent for the time you wait for the market to potentially go down could be significant as well.
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