Tell me about FHA loans!

[heartsy77]

Dh and I have decided it is time to buy our first home! We thought about over five years ago and looked into FHA, but decided to wait.
I have been searching the web trying to figure out what loan program is best. We have the option of using FHA or NY state 1st time home buyer loan programs. The FHA loan process confuses me; I am wondering if the program has changed since we last looked into it. I thought last time we went directly through the USDA for the loan. Did they stop doing this? From everything I find you use the Leander list and start there? Any help would be so appreciated!

 

[ccgirl]

We had an FHA loan on our first house. We went thru my mortgage broker so I don't know the exact details. I do remember that we paid mortgage insurance and when we sold the house 2 years later got all the money we paid in the insurance back. THat was quite a nice surprise. If I remember correctly, the APR was a bit higher than a conventional mortgage but we didn't have any money down so had to go this way. Good luck!

 

[Baloo and Bagheera]

FHA requires a down payment of 3.5% of the purchase price. The monthly payment will include mortgage insurance calculated at 0.9% of the loan amount, divided by 12. FHA/HUD also collects an Up Front Mortgage Insurance premium of 1% of the loan amount, however this amount can be financed into the loan. The seller on the transaction is allowed to contribute up to 6% of the sales price towards your closing costs and prepaid expenses (taxes & insurance). Because of the low down payment requirement and relaxed credit and debt-to-income limits, FHA is a good program for first time homebuyers. If you were planning on putting down 10% or more, I would recommend that you look at Conventional financing.

 

[heartsy77]

FHA requires a down payment of 3.5% of the purchase price. The monthly payment will include mortgage insurance calculated at 0.9% of the loan amount, divided by 12. FHA/HUD also collects an Up Front Mortgage Insurance premium of 1% of the loan amount, however this amount can be financed into the loan. The seller on the transaction is allowed to contribute up to 6% of the sales price towards your closing costs and prepaid expenses (taxes & insurance). Because of the low down payment requirement and relaxed credit and debt-to-income limits, FHA is a good program for first time homebuyers. If you were planning on putting down 10% or more, I would recommend that you look at Conventional financing.

WOW! exactly what is was looking for! Thanks!

 

[ccgirl]

FHA requires a down payment of 3.5% of the purchase price. The monthly payment will include mortgage insurance calculated at 0.9% of the loan amount, divided by 12. FHA/HUD also collects an Up Front Mortgage Insurance premium of 1% of the loan amount, however this amount can be financed into the loan. The seller on the transaction is allowed to contribute up to 6% of the sales price towards your closing costs and prepaid expenses (taxes & insurance). Because of the low down payment requirement and relaxed credit and debt-to-income limits, FHA is a good program for first time homebuyers. If you were planning on putting down 10% or more, I would recommend that you look at Conventional financing.

Great explanation! That's what happened to us. The seller "gave" us back 5% at closing to cover our downpayment/closing costs. It worked out great for us.