Where is the crossover point between FHA and Conv Mortgage

[ldkcivilservant]

Understood thanks!

I just completed the application and it's 'in review' so I'm sure they'll want some documents from me to prove who I am.

I will certainly be taking a look at their mortgage products.

[CreditInspired]

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@ldkcivilservant wrote:

Understood thanks!

I just completed the application and it's 'in review' so I'm sure they'll want some documents from me to prove who I am.

I will certainly be taking a look at their mortgage products.

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You’re on your way to a wonderful banking relationship!

[ldkcivilservant]

You happen to know what their requirements are on this mortgage product?

Our icome is about $82k, DTi is abour 4% when all cards are finally paid down (AZEO) and aspreviously stated mortgages scores are in low middle 700s. No baddies on our reports ever.

[CreditInspired]

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@ldkcivilservant wrote:

You happen to know what their requirements are on this mortgage product?

Our icome is about $82k, DTi is abour 4% when all cards are finally paid down (AZEO) and aspreviously stated mortgages scores are in low middle 700s. No baddies on our reports ever.

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Their CS is awesome. Call their mortgage department and have a discussion with them about all their mortgage products to determine which product suits your specific situation and what you’re looking for. 

Before I applied for my mortgage, I knew I only wanted an ARM because my plan was to live in my home less than 5 years. After researching all their mortgage products and playing with the mortgage calculator, I knew which loan I wanted to apply for since my scores were 760+ and I wanted no PMI. Once you’re officially a member, those tools will be available to you. But definitely contact the mortgage department. 

[Anonymous]

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@CreditInspired wrote:

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@Anonymous wrote:

So it sounds to me that the longer term gain of a slightly lower rate my be offset my a stiff increase in money that we have to fork over in closing. I realise that the lower interest rate should be a priority, but the time crunch that we have (my brother in laws enlistment in USMC ends in February and we are living in his house) means that we don't have all that much time after September when our CC are paid off to actually get things saved up.

Are we able to get pre-approved for an FHA loan before we actually have all of the money in the bank? I would have about $3k in savings (and no debt other than $265 car note) at the end of Ocotber, but if we're looking at neededing at least $10k for the DP and CCosts then it's more likely to be the end of December. Waiting until the end of Dec when we have to be out by 2/1 seems very very tight for closing.

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Hello and welcome to MyFICO

I swear NFCU should hire me the way I market their mortgages. 

First, have BIL sponsor you at NFCU. If he already is a member perfect. If not, he only needs to become a member which can be done in less than 30 minutes. Once you’re sponsored, you pay $5 into savings and you’re a member. And, I would also open a checking acct with them. Why not, it’s free checking. Now comes the beautiful part if your credit profile is good. 

NFCU has $0 down for their 30-yr fixed Homebuyers Choice mortgages with no PMI and conventional ARMs 3/5 or 5/5 with $0 down and no PMI. That’s not a typo. 

And also, they offer Realty Plus, a real estate referral program that nets you a nice size bonus directly deposited into your savimgs account after closing. 

Yes, ask your BIL to sponsor you today. And feel free to ask me any questions because I went the conventional ARM route in 2018. And I’ve never been happier. 

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I must be the only person who's not impressed by NFCU's mortgages. I've not seen anything attractive in the 15 year fixed area. A 30 year @4.5% doesn't meet my needs. The rate of building equity and interest paid is worth paying PMI for 2 years (assuming 20% paydown) on a 15 year.

[CreditInspired]

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i@Anonymous wrote:

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@CreditInspired wrote:

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@Anonymous wrote:

So it sounds to me that the longer term gain of a slightly lower rate my be offset my a stiff increase in money that we have to fork over in closing. I realise that the lower interest rate should be a priority, but the time crunch that we have (my brother in laws enlistment in USMC ends in February and we are living in his house) means that we don't have all that much time after September when our CC are paid off to actually get things saved up.

Are we able to get pre-approved for an FHA loan before we actually have all of the money in the bank? I would have about $3k in savings (and no debt other than $265 car note) at the end of Ocotber, but if we're looking at neededing at least $10k for the DP and CCosts then it's more likely to be the end of December. Waiting until the end of Dec when we have to be out by 2/1 seems very very tight for closing.

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Hello and welcome to MyFICO

I swear NFCU should hire me the way I market their mortgages. 

First, have BIL sponsor you at NFCU. If he already is a member perfect. If not, he only needs to become a member which can be done in less than 30 minutes. Once you’re sponsored, you pay $5 into savings and you’re a member. And, I would also open a checking acct with them. Why not, it’s free checking. Now comes the beautiful part if your credit profile is good. 

NFCU has $0 down for their 30-yr fixed Homebuyers Choice mortgages with no PMI and conventional ARMs 3/5 or 5/5 with $0 down and no PMI. That’s not a typo. 

And also, they offer Realty Plus, a real estate referral program that nets you a nice size bonus directly deposited into your savimgs account after closing. 

Yes, ask your BIL to sponsor you today. And feel free to ask me any questions because I went the conventional ARM route in 2018. And I’ve never been happier. 

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I must be the only person who's not impressed by NFCU's mortgages. I've not seen anything attractive in the 15 year fixed area. A 30 year @4.5% doesn't meet my needs. The rate of building equity and interest paid is worth paying PMI for 2 years (assuming 20% paydown) on a 15 year.

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But that’s just it! Most middle class Americans don’t have 20% down ($60K on a $300K loan)! And on top of that have to come up with another appx 4-6% for closing costs if there’s no seller assistance. 

And it is also absolutely awesome for those who can afford a 15-yr mortgage with 20% down. So yes, I totally agree that those who have that financial capability shouldnt be impressed with NFCU. 

So you see, that’s why I’m impressed with NFCU because I am a middle class American who definitely didnt have 20% down and if I had to wait until I got 20% down, I would never be able to enjoy the American dream of home ownership. 

And one can take that money they’re not paying toward monthly PMI and put it toward their principal, if they can afford to do so, which in turn will increase their equity exponentially. 

And oh yeah, NFCU’s 30-yr fixed rate is 3.5% with 5% down and no PMI. 

[ldkcivilservant]

Alliant appears to offer a similar service (Alliant Advantage Mortgage) and the rate posted appears a good 1% lower than NFCU..

Anyone have any experiance with them?

[Anonymous]

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@CreditInspired wrote:

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And oh yeah, NFCU’s 30-yr fixed rate is 3.5% with 5% down and no PMI. 

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You misunderstood what I wrote. I was speaking of having payed 20% of the principal after 2 years of having the mortgage. The goal is to pay off enough principal over the first two years and take advantage of market appreciation in order to get a reappraisal to get rid of the PMI. Even paying two years of PMI is cheaper in the longer run than being forced into a 30 year term.

I believe most conventional mortgages now are for 5% down. That's most lenders. NFCU isn't doing anything special with that. The thing that's pertinent about the Homebuyer's program is that is requires a 30 year term. This is where they make their money. The whole PMI thing is marketing hype to distract buyers from seeing that regardless of PMI, a shorter term is better for the consumer. Instead, that program overall benefits NFCU. Of course, you coulld refinance later but that's hassle and you have to pay more closing costs.

I ran some quick numbers. Assuming a 250,000 house, and 30 years @3.5 with no down payment, you would pay 154,140 in interest. Total repayment would be 404,140.

Now, a 250,000 house, paying 5% down (-12,500) @ 3.0 (15 year loans usually have lower rates), you would pay 57,724 in interest. Total repayment 295,225.

Would you rather pay interest of 57,724 or 154,140? You could run a side by side comparison of equity earned over time and you'll see the 15 year term allows buyers to gain equity twice as fast.

Bottom line is that while NFCU is one option, there could be better options on the market.

[ldkcivilservant]

The more information that I read online (including this forum) about the NFCU Homebuyers Choice is leading me to believe that it works out more expensive in the long run. Second tier interest (below 720) of 6%? That is far far in excess of what I am hoping to achieve.

There appears to be little direct experiance that I can find of anyone actually getting one of their 'best' sub 5% advertised rates. Bearing in mind how much more that costs over the life of the line, I am wondering if a conventional 3% would be better. By the end of November we would have $9k in the bank and a 3% downpayment on a $195k loan is less than $6k leaving $3k for closing costs and still more being saved while we were looking.

Will lenders that do the 3% down pre-approve before the totality of the downpayment/projected closing costs are showing in the bank? I was still hopinh to apply/pre-approval around the end of October when we will have circa $4k in the bank but won't if we can't do that.

[Merc1776]

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@Anonymous wrote:

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@CreditInspired wrote:

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And oh yeah, NFCU’s 30-yr fixed rate is 3.5% with 5% down and no PMI. 

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You misunderstood what I wrote. I was speaking of having payed 20% of the principal after 2 years of having the mortgage. The goal is to pay off enough principal over the first two years and take advantage of market appreciation in order to get a reappraisal to get rid of the PMI. Even paying two years of PMI is cheaper in the longer run than being forced into a 30 year term.

I believe most conventional mortgages now are for 5% down. That's most lenders. NFCU isn't doing anything special with that. The thing that's pertinent about the Homebuyer's program is that is requires a 30 year term. This is where they make their money. The whole PMI thing is marketing hype to distract buyers from seeing that regardless of PMI, a shorter term is better for the consumer. Instead, that program overall benefits NFCU. Of course, you coulld refinance later but that's hassle and you have to pay more closing costs.

I ran some quick numbers. Assuming a 250,000 house, and 30 years @3.5 with no down payment, you would pay 154,140 in interest. Total repayment would be 404,140.

Now, a 250,000 house, paying 5% down (-12,500) @ 3.0 (15 year loans usually have lower rates), you would pay 57,724 in interest. Total repayment 295,225.

Would you rather pay interest of 57,724 or 154,140? You could run a side by side comparison of equity earned over time and you'll see the 15 year term allows buyers to gain equity twice as fast.

Bottom line is that while NFCU is one option, there could be better options on the market.

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Smart points...Question to you is if you did the 30 year and get the principle down with extra "principle only payments" allocated on check can this get passed the aspects you  talked about?