Anyone have an FHA loan? I'm liking the low PMI, the rate is good, the fee will get put into the mortgage and isn't bad.

Is there a certain time period you have to stay in this loan before refinancing? I'm going to try to build up the 20% equity as fast as possible and would like to refi in a year or two.

Anyone have any positive/negative feedback about FHA loans?

 

I just got a FHA loan a few months ago. No complaints. Got a great rate, and only had to put down 3.5%. The PMI sucks, but once I pay off 20% of the loan, it'll go away. And that doesn't bother me. I had no real plans of buying when I did, otherwise I would have waited until I had a 20% down payment. But then I wouldn't have been able to afford the house that I got.

Anyway, IMO the FHA loan is a good thing. Don't forget, it allows you to have the seller pay up to 6% of the sale price towards closing costs. It does not allow the seller to give you any sort of "repair credit" or anything like that though. And you have to negotiate that when you draw up the offer. But your realtor should be able to help you with that.

 

Well we're locked in. We did go with an FHA. PMI is less and dp is only 3.5%. I, like yourself was also not planning on buying but just cant pass this place up. Looks good so far, I should be able to get to that 20% in a year or so. Till then I guess I'll just suck it up and pay PMI for being stupid all these years and not saving money..

I cant wait to move in! Closing in 3 weeks. Picking out colors as we speak...well she is.

 

I'm on an FHA as well; my PMI is $90/month

 

FHA loan here! I believe my PMI is in the $80-$90 a month range as well. Didn't have enough down to do a conventional loan, and the mortgage payment is so low on the place I bought that the PMI is no big deal. I know it's money that's being "thrown away", but it's definitely better than renting! Once I have 20% equity (through a combination of paying off the loan and the value of the home rising over time), I'll probably re-finance to get rid of PMI.

Other than the very strict FHA underwriters, no complaints here!

 

Yeah, I agree here, the 1.75% fee sucks and the money IS being thrown away but the alternative is to put 5% down (more) and pay PMI which will be 3x more......I'll stick this out, I'm buying the place for 84% of what it's assessed at the city, I'll wait out a year, with a few improvements and hopefully this market getting better, I'll find my 20% happy $ in no time.

How is your new place working out BTW?

 

^It's working out great! I just received the first time homebuyers credit monies so I'm going start landscaping and possibly have the exterior of the house painted (it needs it badly). The only downside is the commute is 15-20 minutes longer than I had anticipated, but it's still manageable. I just need to remind myself that I'm a homeowner with a monthly mortgage payment plus insurances and taxes that come to $200 less than what I was paying in rent.

 

^I've got a similar situation. 15 minutes longer commute, but we're paying $60 more than what we pay now in rent and getting 8 stackerz back

 

^Yeah, the $8k credit is nice.

 

if you do an FHA streamline you get a credit of the 1.75% back to apply towards your next FHA loan. plus with the streamline costs are a lot less then a regular refi. plus the monthly MI goes away after you hit 78% Loan to value.

and no there is no set time period that you must stay in the house. to be honest FHA is a great program. yes the 1.75% up front sucks but the monthly MI is very low.

if you guys want to hit the 80% mark, just make sure you are there, considering how appraisals are coming back especially with the HVCC regulations put in place. Appraised value are all over the place.

also you want to be at least above a 720-740 middle score between the three credit bureaus if you want to go with a conventional Refi below 80%. you will get the best if this is the case.

 

I talked to my banker, you can refi an FHA loan after 4 months...

My buddy who is a realtor told me 5 years - that's what got me nervous. Apparently and thankfully he was wrong.

 

^ Never listen to realtors. They know how to sell houses... and that's it!

Most think they know about everything else... but they don't.

 

While I agree with you, this was a friend, who just happened to be a realtor...who I guess doesn't know as much as he thinks he does.

I couldn't be happier that he was wrong!

 

do not listen to a Realtor...they have no idea what is going on in the banking industry, i apologize in advance for anyone one that is a realtor. banks and also government regulations changes how they lend everyday. new disclosure policies came out last month...MDIA.

you can realistically refi your fha mortgage once it's becomes insured. normally 3-6 months depending on the investor.

 

If we end up buying soon, we will be using FHA. We were originally planning on using a teacher program, but we don't meet all of the requirements.

Question about the 1.75% fee. Is that something you pay at closing or can it get rolled into the loan?

 

^^ Are you talking about the MIP ?

 

There was mention of a 1.75% fee. I'm not sure if that's a processing fee, MIP or what?

 

I don't remember; I know I have a $90 deduction for mortage insurance every month..

I think there was some sort of upfront fee, but i'd have to look at my final hud statement

 

I don't remember exactly what the 1.75% means, basically it's just like PMI, first you kind of "fill up the fund" with 1.75% and then you pay monthly.

The 1.75% does get rolled into the loan.

 

Why do you want to refi? Isn't the FHA rate good? I thought the FHA rates were usually the lowest so there wasn't much need to refi. I have an FHA loan, 4.25%, 30 yr fixed.

 

The rate is good. But I am hoping that I'll gain 20% equity within the first year or two so I can get rid of my PMI. I can refi, even into another FHA loan but I can stop throwing money away.

 

My loan officer said I could do a streamline refi a week after closing if I wanted! lol

A chunk of your closing costs was upfront mortgage insurance. I don't remember how much mine was...I think the seller paid it, lol

 

You shouldn't have to refi to get rid of the PMI once below the 80% Once below it you can call and have it removed if your mortgage co hasn't already done it (mine did it automatically)

 

How did you get the first time home buyers tax credit already? I am about to close in a few days and I thought that you would receive the credits during the 2010 tax season.

 

You can file and amendment to get it sooner.

 

Damn that sounds good. How will I be able to file the amendment? Thanks

 

Fill out a new, full 1040 (which should be identical to your old with exception of the first time homebuyer credit), a 1040x (which basically shows the IRS what changed), form 2008 form 5405 (first time homebuyer credit form), and attach any other paperwork that was included with your original return. Then mail all to the IRS and wait 8-12 weeks for them to mail you a check.

 

Great I can use the tax credit. Thank you!!!

 

you can not streamline after a week you must wait until the loan is insured...typically 3-6 months. plus it would be a waste to streamline that early you will have no benefit to do it.

the 1.75% is Mortgage insurance premium. it is added on top of the amount financed, basically it is rolled into the loan but is not counted in your loan to value ratio when dealing with a purchase or Refi. you will have monthly MI if it is a 30yr FHA or 15yr FHA above 90%LTV. for the 30yr FHA the monthly MI is 2-3 times less then MI on a conventional loan. and for the 15yr above 90% it is 5-6 times less then conventional MI on a 15yr.

you can get rid of the monthly MI after 80% LTV in either case.

 

this is correct...

 

Question for you guys that have FHA loans?

Did you get to deduct the points paid by the seller in the year paid or over the life of the loan? IRS Publication 936 covers this; however, the borrower has to pass like 9 specific tests to get it all in the year paid. Otherwise, you have to deduct over the life of the loan.

 

So, I guess I should call my lender?

Paid $175k, loan for $171k and change, and according to Zillow (I know they're not _that_ accurate) my house is worth between $229k - $320k. Though, when I bought it in June, it appraised for $175k...not sure where Zillow gets their numbers.

How long would it take a lender to automatically make this adjustment?

 

^ Called Wells Fargo...I don't have PMI...I have a MIP (lmao) which I guess is an FHA specific mortgage insurance sort-of deal. Going to be receiving MIP terms and conditions in the mail to see what I can do to eliminate it. Interesting...

 

I don't mean to rain on your parade but...You will likely have MIP for a long time unless there is something really special about your market which I doubt.

Your real market value is based on recent sales (three months right now) from within your neighborhood. If the same model is available even better. Zillow just pulls everything around the same square footage from within about a mile. They sometimes use sales up to a year old which don't fly with lenders.

You got a really nice looking home at a good price but there is little to no appreciation in the area now or for an extended period. You may want to consider fixing it up so that you are very comfortable and enjoy home ownership. The value and appreciation are going to come from pride of ownership for a while. Don't worry about the value, just that you can afford to pay for it. Improvements should be for you and designed to not reduce the value.

 

^ I'm not worried about the value of the house...I could care less. It's a home first, investment second. I was only curious and if there are options available it doesn't hurt to ask.

I've often wondered how Zillow gets their numbers. I know my house isn't worth what they list it as! But one can dream...lol.

I'm only interested in dropping MIP because it's money that's being "thrown out the window" so to speak. From my research, it looks like I'll be paying it for a minimum of 5 years (unless I'm able to re-finance into a conventional loan sooner, of course). If after 5 years my loan is paid down 20% vs the appraisal when I purchased, then MIP can be removed.

Once I have the house fixed up maybe I'll re-visit the whole refinance thing....but that'll be years away! lol

 

Sorry, more rain! I am fairly certain that you need to have 20% equity at the time you try to have MIP removed based on the value as of that date, not the date of purchase price. Enjoy the house. You're right, doesn't hurt to ask or to dream.

Feel free to check the accuracy of my opinion because I'm one of those dumb real estate brokers who doesn't know jack about financing. To make it even worse, I'm also an appraiser and have been a home owner multiple times.

 

Your statement is correct!
It depends on the terms, I'm thinking he has a 30 yr. mortgage.

http://www.bills.com/fha-mortgage-insurance/

"Removal: Unlike PMI, the FHA MIP is mandatory for the first five years of loans with terms of more than 15 years, even if your loan balance reaches 78% of the original home value or sales price. PMI premiums can often be removed if the loan balance is below 80% of the current market value.

 

^ Yep!