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Posts: 37
Registered: ‎12-02-2012
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Re: FHA loan with 20% down (and no PMI)?

Makes sense. For us, we are looking to move into the home we plan to be in for the next 20+ years, possibly even to retirement (we are in our 30s now). The house we found is perfect and we optioned out with everything we have ever framed of in a house. We would do a conventional if we could but dr to credit, we can't. We could possibly wait until Jan 2014 to qualify for a conventional loan, but we would still want a new build so if we apply in Jan 2014 it wouldn't be ready until June/July 2014 and how much will prices go up by then and will the house we fell in live with still be available? Plus who knows what interest rates will be in mid 2014?

The MI on an FHA loan would cost us about $26k though over 5 years and that's a lot of wasted money. Refinancing to a conventional and putting 20% down seems to make a lot of sense to us, at least at the moment.

Starting Score: Equifax: 529
Current Score: Equifax: 672
Goal Score: 720

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Posts: 3,302
Registered: ‎06-09-2010
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Re: FHA loan with 20% down (and no PMI)?

My personal opinion is my opinion only, but in your situation I would opt to purchasing now if you can afford it even under the circumstances you feel 26k is a lot of wasted money. While I agree with you on wasting money sounds foolish I also agree with you that the prices on homes especially in certain areas have been increasing. 


New built home sales in my area with similar square footage and layouts have increased between 10k and 15k in the last 6 months depending on options etc etc...  if interest rates also begin to rise that will also increase your payment. So many things to look at in purchasing a home and making a decision makes all our heads spin. 


Once again you also have the option to refinance if you feel at the time the numbers are good for you and cost effective to change to a conventional loan once you qualify. 

Good Luck
May all your dreams and wishes become a reality!

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