Re: Home loan question - 20% down or FHA????
Umm what happened to 4% down..and 3.75...I believe you need another broker..Many are used to the old days of rape and pilage
This is the way I went roughly a year ago. It seems to work out for me. I got some of my PMI back in the form of a tax refund. I also nailed an 8,000 tax credit which I most-likely will not put towards my home but rather invest in Roth and 401k. I have 30 years to pay that home off.
The appropriate question is two parts:
1. Do you plan on living there longer than say 7-10 years?
2. How confident are you your financial situation will go in a positive direction?
3. Also, how old are you? If you're older I would put 20% down.
If you are going to be there a while and pretty confident your income is holding up with cost of living increases I would skip the 20% down and do FHA.
I will tell you this, there will be surprise costs associated with buying a new home. I chose to go FHA, took my unused downpayment money and literally dumped it right back into the home. 20k or so. New Roof, new fence for the dog, new garage door and opener, all new paint and other minor odds n ends like blinds and cabinet hardware and light switch plates and cold air return vents etc.
My neighbors purchased there home 1month after me and they appear to be "house-poor". I say this because the kid was using a hand-push lawn mower last year, he didnt have the proper shoveling equipment for this winter, and they just seem to be a little behind in getting the painting done. Also they never leave there house, but as I mentioned it could be there choice.
Be sure to seperate your emotions in the sense of what you THINK the house should sell for vs what the actual VALUE of the home is.
Also, find a good mortgage broker, actually find 2 and play them against each other. I found the weak link that way and stuck with the Winner. To me it was important that my broker was experienced, and not just stating they were experienced. This was all sorted out when I pruposed similar questions to 2 different brokers.
Good Luck my friend!
