Need advice....approved but looking for options

[VALoanMaster]

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@frank784 wrote:

I'm going to call my credit union on Monday and ask about the extenuating circumstances for the conventional loan. If that were the case I would love to get approved under the 80/15/5% down that we talked about earlier. Seems like it would be a win all around. 

@If that's not a good I want to shop around with other credit unions to see if they can beat the current rate I was quote for 20 years @ 5.875% with 10% down. That's an inhouse loan so I'm sure other credit unions have similiar programs. When I looked at some other local ones online their rates go as low as 3.75% for the 20 year fixed. 

I know my score of 676 isn't great but the two point difference is reflecting approximately $280/month. If I can shop around and get something lower it's very adventageous. 

My gut feeling is if I can prove why I foreclosed prior (Father's kidney disease) and the loan gets to the underwriter that I know I will get it pushed through.

My father and step mom have had accounts with them for about 7 years and have multuple auto loans that they have paid in full.

Any other recommendations are appreciated.

Thanks 

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I really don't think a conventional loan with a 10 or 15% 2nd mortgage is very feasible given your circumstances. Remember this. With a conventional loan you have to pass 2 different sets of underwriters, the lender & the PMI company or a 2nd mortgage lender. 

Unless you have a 720+ score, FHA is going to give you the lowest overall monthly payment & the least out of pocket costs. 

FHA meets both of your stated goals so I'm not sure why you're reluctant to pull the trigger.

As far as who you're better off getting your FHA mortgage from? I would go with mortgage banker simply because that's all they do, mortgage lending.

[frank784]

The reluctancy comes in with having to pay so much in PMI. The FHA with 3.5% - 5% down solves the down payment issue, but the PMI will run mid 350-450/month. Hopefully I'm wrong on this part. 

5.875% on the inhouse loan seems aggressive as well as a 20 year term. Sucks my score isnt a little higher since I know that's a big factor. I'm not sure if another credit union can do something lower but I see other rates on local websites starting at 3.750%. 

I would be ok doing an ARM of some sort too since I have every intention of paying the mortage off at an accelerated schedule. 

Thanks again! 

[VALoanMaster]

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@frank784 wrote:

The reluctancy comes in with having to pay so much in PMI. The FHA with 3.5% - 5% down solves the down payment issue, but the PMI will run mid 350-450/month. Hopefully I'm wrong on this part. 

5.875% on the inhouse loan seems aggressive as well as a 20 year term. Sucks my score isnt a little higher since I know that's a big factor. I'm not sure if another credit union can do something lower but I see other rates on local websites starting at 3.750%. 

I would be ok doing an ARM of some sort too since I have every intention of paying the mortage off at an accelerated schedule. 

Thanks again! 

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The FHA MI will be $205.06 per month for a $300,000 purchase with 3.5% down.

That's it.

Let's look at my first response again:

The CU offer at 5.875% with 10% down gives you a PI payment of $1,914.94 while the FHA payment with the FHA mortgage insurance & only 3.5% down would be $1,567.24.

So you get a $347.70 per month lower payment & you get to keep $19,500 in your pocket to go FHA. Plus underwriting will be a little easier going FHA in my opinion.

[frank784]

I think I misread what you wrote earlier but thank you for the clarification. That's great news! FHA it is!!