Is FHA all that is out there?

[Anonymous]

I am looking into buying a home. My scores are all in the high 600s according to the first place I went to. I am putting 40% down.  have no debt and I my Ratio will be about 17%

Why is FHA the first thing the mortgage people mention to me? IMHO, with 40% down I shouldn't need any mortgage insurance, FHA or otherwise. Do they get additional income by pushing me into FHA?

[ShanetheMortgageMan]

Your name reminds me of someone from ArtofCredit, a very old, now defunct, website.

Anyway, you'd have to ask the loan officer you've spoken to why they are recommending FHA over conventional.  My question to them would be is there something on credit that would prevent you from qualifying for conventional?

Regardless of the loan program, loan officers are compensated the same these days - based on a % of the loan amount.  Doesn't matter to me if someone chooses conventional over FHA, although there will almost always clearly be a better loan program (assuming someone is able to qualify for both).

However, with 40% down you will still have mortgage insurance with FHA.  There is an upfront mortgage insurance premium of 1.75% of the loan amount + an annual amount of .8% (term greater than 15 years) or .45% (term of 15 years or less).

[kc0039]

Any bankruptcy or foreclosure in the past 3-4 years?

[Anonymous]

That was probably me on Art of Credit. That was quite a long time ago - AoC closed about 11 years ago.

When I ask them they keep harping on the low down payment requirements and other things that makes me thing they haven't heard a word I have said.

No BKs within the last 15 years and no foreclosures ever. Whatever baddies I have go away in 60 days or less.

[Anonymous]

Can't think of any scenario with your situation where conventional doesn't make for the better long term decision. The difference in rates between fha and conventional would not make the mandatory pmi worth it.

[ShanetheMortgageMan]

There was some pretty aggressive tactics discussed at AoC.  I remember Psychdoc always gave valuable advice.

Maybe they are confusing your 40% down as 4% down.  Other than that, can't really think of a reason why they'd keep bringing up FHA... unless you need a rehab loan, but even then there are conventional rehab loan options out there.

[StartingOver10]

There is no reason to do business with a mortgage LO that isn't going to listen to you. I have found some LO's almost read from a script (sounds like it) and they aren't worth your time or effort or money.

Find someone that knows the business well. I have a few excellent LO's I work with across the country and it makes a huge difference in the entire experience to have a great LO.  

The one's you talked to sound like they haven't actually listened to you at all....I wouldn't go any further with them or your mortgage experience will (probably) be a nightmare.

[kc0039]

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@Anonymous wrote:

That was probably me on Art of Credit. That was quite a long time ago - AoC closed about 11 years ago.

When I ask them they keep harping on the low down payment requirements and other things that makes me thing they haven't heard a word I have said.

No BKs within the last 15 years and no foreclosures ever. Whatever baddies I have go away in 60 days or less.

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Go conventional. Switch broker/lender

[Anonymous]

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@ShanetheMortgageMan wrote:

There was some pretty aggressive tactics discussed at AoC.  I remember Psychdoc always gave valuable advice.

Maybe they are confusing your 40% down as 4% down.  Other than that, can't really think of a reason why they'd keep bringing up FHA... unless you need a rehab loan, but even then there are conventional rehab loan options out there.

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I am the one who made AoC that aggressive. When I was "asked" by AoC management to take my radical ideas elsewhere (like to my own Board) I did that and Debtorboards was born. The posts I took from AoC (of which I was the author) became the core of Debtorboards. The philosophy of DB is the most radical there is - wait for a violation of law by a creditor, knowing it will eventually come, and sue.

[ShanetheMortgageMan]

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@Anonymous wrote:

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@ShanetheMortgageMan wrote:

There was some pretty aggressive tactics discussed at AoC.  I remember Psychdoc always gave valuable advice.

Maybe they are confusing your 40% down as 4% down.  Other than that, can't really think of a reason why they'd keep bringing up FHA... unless you need a rehab loan, but even then there are conventional rehab loan options out there.

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I am the one who made AoC that aggressive. When I was "asked" by AoC management to take my radical ideas elsewhere (like to my own Board) I did that and Debtorboards was born. The posts I took from AoC (of which I was the author) became the core of Debtorboards. The philosophy of DB is the most radical there is - wait for a violation of law by a creditor, knowing it will eventually come, and sue.

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Well, at least you weren't LizardKing level.