Reply
Member
Posts: 37
Registered: ‎12-02-2012
0

FHA loan with 20% down (and no PMI)?

[ Edited ]

Is it possible to get an FHA loan and put 20% down so therefore not having PMI or is PMI required on all FHA loans? Already applied for an FHA loan but won't be ready to close until mid 2013 and now I see they may change the PMI rule so it's for the life of the loan. 

 

Can't go conventional due to a Ch 7 bankruptcy that was discharged Jan 2010. 


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


Take the FICO Fitness Challenge
Valued Contributor
Posts: 3,302
Registered: ‎06-09-2010
0

Re: FHA loan with 20% down (and no PMI)?

[ Edited ]

Yes you may have FHA loan without monthly MI

Good Luck
May all your dreams and wishes become a reality!
Valued Contributor
Posts: 2,300
Registered: ‎08-25-2011
0

Re: FHA loan with 20% down (and no PMI)?

Hmm thats an interesting idea.

Member
Posts: 37
Registered: ‎12-02-2012
0

Re: FHA loan with 20% down (and no PMI)?

Google search says you can't avoid Mortgage Insurance on an FHA loan, no matter how much you put down.

Guess the best thing to do would probably be to get an FHA loan now and then refinance to a conventional loan about 6-12 months later.

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


Take the FICO Fitness Challenge
Valued Contributor
Posts: 3,302
Registered: ‎06-09-2010
0

Re: FHA loan with 20% down (and no PMI)?

Yes it can be done. 

 

The usually scenario is the loan has to be 

 

1- a 15 year loan

2- 22% paid down ( 78% ltv)

 

 

Good Luck
May all your dreams and wishes become a reality!
Member
Posts: 37
Registered: ‎12-02-2012
0

Re: FHA loan with 20% down (and no PMI)?

[ Edited ]

True, with a 15 yr loan, once you get to 78% LTV then the MI gets cancelled. With a 30 yr FHA loan its 78% and 5 year minimum. Meaning, you have to pay at least 5 years worth and now possibly for the life of the loan if the rules change.


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


Take the FICO Fitness Challenge
Valued Contributor
Posts: 3,302
Registered: ‎06-09-2010
0

Re: FHA loan with 20% down (and no PMI)?

The rules and qualifications can change at any point. Some times these changes benefit the buyer and some times the changes hurt the buyer.

 

The catch to not paying the monthy mortgage insurance fee is paying the one-time upfront fee, having a 15 year mortgage term, and paying 22% down ( leaving you with a 78%LTV ).

 

I did forget to mention the upfront fee on my last post my error sorry. 

 

But in my opinion paying up front fee is worth it.

 

What causes issues about this scenario is the monthly payment on the 15 year loan Is generally not affordable to most applying for FHA loan. Most consumers applying for FHA apply for lower down payments and credit issues. Not saying that this is your personal situation, just giving my opinion on why most apply under FHA guidelines for qualifications.

Good Luck
May all your dreams and wishes become a reality!
Member
Posts: 37
Registered: ‎12-02-2012
0

Re: FHA loan with 20% down (and no PMI)?

What are your thoughts on doing an FHA loan, rolling the upfront fee into the loan and then refinancing into a conventional loan 6 months later? Any down sides to this plan?

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


Take the FICO Fitness Challenge
Valued Contributor
Posts: 3,302
Registered: ‎06-09-2010
0

Re: FHA loan with 20% down (and no PMI)?

 

Let me mention one more thing as far as 5 years in case any one else reads this.

 

Yes your mortgage insurance premium can be dropped after 5 years as long as you have reached 78% LTV.

 



If you are just paying your monthly payment and only put down 3.5 % you will not be close to a 78% LTV in 5 years.

 

The down payment you put down will play a part in how long it will take to reach that 78%LTV.

 

Also paying additional payments will play a part in how long before reach that 78%LTV.

Good Luck
May all your dreams and wishes become a reality!
Valued Contributor
Posts: 3,302
Registered: ‎06-09-2010
0

Re: FHA loan with 20% down (and no PMI)?


JohnL1900 wrote:
What are your thoughts on doing an FHA loan, rolling the upfront fee into the loan and then refinancing into a conventional loan 6 months later? Any down sides to this plan?

You would have to look at the numbers available 6 months from now. The cost to refinance may not be worth all the trouble and fees associated with the refinance ( closing  fees, appraisal fees, broker fees ( even banks and credit unions charge fees) etc etc...  Then you always have the possibility the interest rates go up ( not likely in my opinion, but I have been wrong before) . 

 

We all have different intentions on if we are buying a forever home, a home we plan on selling and possibly upgrading to a larger home down the road, or even possibly a future income potential. Many different factors to consider if refinancing is cost worthy when you are ready. 

 

It will always be a personal choice, but hopefully your broker or lender will weigh all your options and explain in their opinion if refinancing is honestly worth it In your peticular situation.

Good Luck
May all your dreams and wishes become a reality!
Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.