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Home loan question - 20% down or FHA????

If I do 20% down, that leaves me 5 weeks pay in bank, if I do FHA, will have 9 mos pay in bank. Job is good, been there 5 yrs, no layoffs in sight, I always get 2 mos pay back in tax returns and save 200-500 bucks a month, sometimes more. 20% down would be about $100 - $200 cheaper than Ive been paying in rent, FHA would be about $600 a month more than my current rent - doable but not desired! Any hints?? Oh, this is a 30 yr fixed on 20% down, I'd refi asap. Thanks guys! by Heinzc_502_655 from Concord, California. May 17th 2012 Reply


William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

This is where a competent loan officer can help you with your decision. If you dealing with the local bank, or an internet or 50 states lender, you won't get answers to questions like this. My philosophy is "Cash is King". With rates so low right now, i would use as little of my own money as possible and keep it in my bank. Also keep in mind that there are benefits of owning a home that you don't get when you rent. For example, you will have interest to write off, as well as depreciation. This will lower the amount of taxes you pay, so you could lower your withholding rates, or receive a larger refund at the end of the year, effectively lowering your monthly cost to own vs. rent. I'm talking here in general because you didn't provide all the necessary information to properly answer your question... The best advice I can give you is to contact a LOCAL mortgage broker, not the local "Big" bank, and certainly not one of those 50 states internet lenders...By applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with numerous lenders, seeking out the best loan terms for your particular scenario. Because he has lower overhead, he can offer you lower rates and lower fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

May 17th 2012
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Crestico Funding (CresticoFunding)
#314 ranked lender in California - 340 contributions

Hello Heinz,there are pros and cons with both scenario beside the money left in your bank account, you have to consider the Mortgage Insurance, Interest Rate couple of other factors before making a decision, Please feel free to contact us for a hassle free consultation. we can help you put together pros and cons and help you make a decision based on the facts. Houtan Hormozian (310) 933-4748 Houtan.Hormozian@Crestico.com

May 17th 2012
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Robert Le (robert_le)
#620 ranked lender in California - 36 contributions

Hi,It all depends on you. You can still down less than 20% and do not have to go with FHA. However, if you down less than 20% then you have to pay for PMI. For FHA, you have to pay upfront MI - 1.75, then you have to pay MI for 5 yrs and your Loan-to-Value (LTV) has to be less than 78%.Most Lender calculate a backend ratio = all debt expense / gross income. If you backend ratio is above 45%, then the lender will require 6-12 months reserves. If less than 45%, then 0-3 months reserves. If you have 401k or any retirement plan, then you can ask use that as reverse up to 50-60% of what is in your 401k.If you have any questions, please contact me at robert.le@greenvillemortgage.net or 714-943-6499

May 17th 2012
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Brian LeBars (brian_386_375)
#623 ranked lender in California - 3 contributions

Hi. You may want to consider an 80/10/10 option. We offer the 90% LTV with no mortgage insurance. This would allow you to preserve some reserves while taking advantage of conforming financing. I'm in Pleasanton and would be happy to discuss your options.Brian925-708-5400brian@vintagemortgagegroup.com

May 17th 2012
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Linda Wintersteen (Linda123)
#62 ranked lender in Arizona - 1,256 contributions

call me ,, at 6023301598 i can lend in ca are you doing a purchase or a refi? by your last line, its confusing... i have other loans that you might what to consider.. it depends on the size of your loan email me at yourloanpartnerforlife@live.com i might have a way for you to put less down... linda by the way, are you german?? i am...

May 17th 2012
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Jonathan Rhode (jrhode)
#183 ranked lender in California - 130 contributions

Hello Heinz-FHA is a great option if you have a high DTI (debt to income ratio) or, you have very little to put down. But, with an FHA loan you will have to absorb into the loan amount 1.75% for the UFMIP and also pay a fairly high monthly MI. Based on what I hear in your question it sounds as if you would like to maintain a fair amount of reserves in your bank account. With that being said you may want to consider a program that offers "split MI" or go with lender paid MI. Both of these programs will require you to put less than 20% down and put you in a better reserve position. If you would like to discuss these options further please feel free to contact me at 877-401-1389xt103 or email me at jrhode@cstonemortgage.com

May 17th 2012
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