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588 FICO, which FHA??

Hello all.. with my current credit situation, i can only be approved for an FHA loan, however i am able to provide 20% down on the property i wish to purchase. obviously, id like to go conventional to avoid the mortgage insurance, but this isn't an option. So i was thinking to go with either an FHA 30 fixed, or FHA 5/1 ARM with hopes to refinance in 5 years to a conventional fixed rate. I understand all the costs upfront and monthly for FHA, but have no choice. My question is, do I go the FHA 30 fixed or 5/1 ARM, and how much should I put down? Do i go the full 20% i can afford, or just go the minimum 3.5%? Thanks for all your help in advance! by e_sther from Savannah, Georgia. Jun 15th 2011 Reply


FHA only requires 3.5% down but with your scores you may be obligated to put down more. I would take the stability of a 30 year fixed as there is not much difference in a 5 year arm and a 30 year term. The other reason is that there is no surity that rates will be this low in 5 years or that you will have 20% equity in the property to refinance out of the PMI and avoid any large rate adjustments over the remaining 25 years. Mike Covin has a product you should look at-see below!

Jun 16th 2011
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If it were me, I would take the stability of the 30 year fixed. You never know what will happen to values and the mortgage industry. If you benefit from a lower payment by putting 20% down, then do that. If the payment difference is minimal and you can put that other 15% to use somewhere else, then you should do that. I believe with that credit score, most lenders will require a 10% down on the FHA program. Good luck

Jun 15th 2011
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You will be better off going with a rate that can never go up. No one knows what the rates will be in 5 years but most believe they will be higher. I would leave good enough alone and go with a low fixed rate in the 4's.[URL=http://www.fernbankmortgage.com]Georgia Mortgage[/URL]

Jun 15th 2011
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go 30 just in case you do not qualify down the road. How much you put down depends on how much money you feel you personally need in reserves after the purchase

Jun 15th 2011
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hi there: If you are interested, I have private investors I work with that lend their own money and no upfront MIP nor monthly..What is the loan amt etc? Credit is not really a factor with these private investors but just proving income and exit strategy...Mike (703 505 5300)

Jun 15th 2011
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