re: Other than PMI insurance

condos are considered riskier in terms of DQ and foreclosure rates.

understood. But if he went with a regular house, how much would the not-putting-down 20% thing affect his rate/ability to get the loan/etc.?

A Single Family Residence is different b/c of a few reasons ...
* You can pick your own HOI. Condo's usually have Home Owners Associations that pay the HOI that they collect from your monthly dues. While most subdivisions have HOA's those HOA's don't usually pay HOI.
* Also a condo usually has a shared wall, so its attached to aonther person's wall. Think about it, if your neighbor is cooking meth and his kitchen explodes, your wall is probably going to be affected or effected.
* When a developer builds a condo, or they convert apartments into condo's they have to get FHA and/or Fannie Mae approved to show that they meet their guidelines. Credit was so fast & easy a couple of years ago that many of the developers didn't take the time or pay the money to get approved. which is why condo financing is so difficult.

I agree with displaced horn, a Single Family Residence is alot easier to finance and usually a much better investment, it will appreciate faster and is MUCH easier to sell when you decide to later on.


1 more thing regarding the MI, FHA requires you to have MI for at least 5 years or until your LTV (Loan to Value) goes below 78%. So, if you get an FHA loan, then pay your principal down to 78% within the 1st few months/years you will STILL have MI, remember you will have it for AT LEAST 5 years.

Hope I was some help, Good luck.

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it will appreciate faster and is MUCH easier to sell when you decide to later on.

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But if real estate appreciates wouldn't it stand to reason that rent demand would also appreciate?

I'd rather rent the condo if I planned on moving into another house.

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1 more thing regarding the MI, FHA requires you to have MI for at least 5 years or until your LTV (Loan to Value) goes below 78%. So, if you get an FHA loan, then pay your principal down to 78% within the 1st few months/years you will STILL have MI, remember you will have it for AT LEAST 5 years.

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is that on a particular kind of loan, or just anything out there?

better interest rate? less money wasted paying interest since principal balance will be lower? less chance of blowing the money elsewhere?

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Powerman

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adopt me please, I'll have your babies

powerman its not you that the lender is worried about as much as the type of property you are buying. condos have a high foreclosure rate due to the amount of condo's bought as investment proopertys and second homes thats why the REQUIRE 20% down for conventional. and yes no matter what on an FHA loan you have to pay PMI for 5 years. thats there rule. plus you have to pay an upfront 1.75% of your loan amount to them that is financed into your loan.

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From what I understand you can get pretty competitive rates with an FHA loan

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Comment: think you are right.

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And I'd always have the option to refinance by putting more in later right?

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Comment: yes but you will have to pay closing costs to refinanace later and if rates go up you will not want to refinance.

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And in this case I would think that the difference in down payment ($13,200) would do me more good to still have in hand.

I could easily make 100 a month in the market on that

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Comment: $100 per month on $13,200 is a 9.1% return. I'm not saying you can't get 9.1% but you will have to take some risk. And after you pay your PMI each month you'll only have about half the $100 left. Isn't there some out of pocket upfront fee with PMI as well? I'm not sure so I am asking.

Finally, I'm not arguing with you. Your question simply asked about any advantages other than no PMI of putting 20% down. As someone else mentioned, if you can get a low interest rate you get the most leverage by borrowing as much as someone will lend you. If you can afford it go ahead.

PHD you are so right you dont even know it.Texas has its own set of mortgage rules to play by. FHA does do townhomes and condos. but there is a difference between a townhome and a condo with FHA. one is attached the other may not be. also townhomes tend to have a smaller number of units than condo's. with FHA its all about the spot approval..which requires a good home owners assocation and a good mortgage broker..

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you cant sell condo by LSU right now

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Hmm I guess i need to tell two of my friends whose parents each just sold their townhouse in Lake beau pre in less than 2 weeks for full asking price. I will let them know they didn't sell.