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Started By
Message
FHA or Conventional?
Posted on 3/20/20 at 7:38 am
Posted on 3/20/20 at 7:38 am
Closing on a house very soon.
My FHA rate is 3%. My Conventional is 3.25%. I'm doing the minimum at closing. 3.5% for FHA 5% for Conventional. Both 30 year
After crunching the numbers, it looks like not much difference with FHA being lower..
I'm leaning towards Conventional because we are planning on being in the house longer than 10 years. Plus PMI coming off after 20%
Thoughts?
Thanks in advance guys
My FHA rate is 3%. My Conventional is 3.25%. I'm doing the minimum at closing. 3.5% for FHA 5% for Conventional. Both 30 year
After crunching the numbers, it looks like not much difference with FHA being lower..
I'm leaning towards Conventional because we are planning on being in the house longer than 10 years. Plus PMI coming off after 20%
Thoughts?
Thanks in advance guys
8
Posted on 3/20/20 at 7:41 am to GeauxTGRZ
Depends on how the numbers work out for you, but I am currently kicking myself for taking an FHA and not a conventional because of this..
quote:
Plus PMI coming off after 20%
Posted on 3/20/20 at 7:43 am to GeauxTGRZ
Conventional.
Posted on 3/20/20 at 7:43 am to GeauxTGRZ
Another nice feature of FHA is that a potential buyer can assume the mortgage.
Posted on 3/20/20 at 7:48 am to Pintail
Being able to drop PMI is a big deal.
Posted on 3/20/20 at 8:06 am to GeauxTGRZ
I plugged it into a spreadsheet I created when thinking about refinancing my home. Assuming
-0.5-1% PMI
-30 year
-3% FHA vs. 3.25% conv
-You maintain the same payment after PMI is over on conventional
You are looking at a 115-123 month break even on equity. At this point Conventional becomes the winner. If you pay extra each month, that will lower the break even point.
-0.5-1% PMI
-30 year
-3% FHA vs. 3.25% conv
-You maintain the same payment after PMI is over on conventional
You are looking at a 115-123 month break even on equity. At this point Conventional becomes the winner. If you pay extra each month, that will lower the break even point.
This post was edited on 3/20/20 at 8:10 am
Posted on 3/20/20 at 9:03 am to GeauxTGRZ
FHA adds a 1.75% premium upfront to your loan amount. Unless your credit score is below average and you are getting huge PMI rates you should be going conventional.
Posted on 3/20/20 at 11:15 am to LSU82BILL
quote:
Another nice feature of FHA is that a potential buyer can assume the mortgage.
I’d be *extremely* careful in allowing a subsequent buyer to assume a HUD loan. Unless something has changed, HUD loan assumptions don’t remove the original owner from responsibility for the loan. The original owner still maintains liability for the balance of the loan, along with the new owner. The only way to get out of that is through the novation process.
Best to check with a mortgage broker or banker who is probably more up to date than I am though.
Posted on 3/20/20 at 1:53 pm to GeauxTGRZ
Factor in the mortgage insurance and then see what your rate is. I just refi-ed out of a fha. Came out to be almost 1.5% lower rate.
Posted on 3/20/20 at 2:07 pm to Lsutiger2424
15 or 20 year? How much did your monthly payment go down?
Posted on 3/20/20 at 2:27 pm to Paul Allen
Started out 30 year fha because I was eligible for the first time home owners program, which gave me $25,000. When I did it in December I elected to do a 20 year conventional instead of refinancing the 24 Years which I had left.
My rate now is 3.625 at 20 years.
With the FHA loan, after the PMI was factored in it was like 4.8% or around that. I don’t remember the exact number.
My note on my new Conventional loan which shaved 4 and a half years off is $100 lower than what I was paying with the FHA loan.
My rate now is 3.625 at 20 years.
With the FHA loan, after the PMI was factored in it was like 4.8% or around that. I don’t remember the exact number.
My note on my new Conventional loan which shaved 4 and a half years off is $100 lower than what I was paying with the FHA loan.
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