What's new

1st time FHA home buyer question.

DR. SMASHER

Smashing things
Joined
May 21, 2020
Member Number
976
Messages
173
Loc
NJ
I will be a first time home buyer but my wife is not. She makes more money then I do but we will both be on the mortgage. Will we still be able to qualify for an FHA loan with her not being a 1st time home buyer but I am? The interwebs search goes back and forth on this. I was hoping the Irate has some more accurate information on this.
 
My first two homes were fha loans. Ex wife was on the second and I made twice what she did at the time. This was about 10 years ago, not sure if anything’s changed. I don’t know that fha cares about that, mortgage insurance sucks though. I’d avoid fha if you can.
 
If one coborrower has owned a home, then the first time buyer perks aren’t available.

A good mortgage broker will have alternative loans that are as good or better than FHA loans.

Also, in a competitive buying situation an FHA loan will be a big disadvantage to your offer.
 
Last edited:
I have read that the required down for an FHA is only 3.5% right now. Where does that come back to bite other then the extra principal remaing?
 
I have read that the required down for an FHA is only 3.5% right now. Where does that come back to bite other then the extra principal remaing?

FHA appraisals and inspections have more restrictions. our house was a flip, no stove meant no FHA. there are others but as mentioned give current competitive market youre offer will not be considered.

beyond that its an expensive loan loaded with cost to protect the lender. good idea, bad product.
 
My first two homes were fha loans. Ex wife was on the second and I made twice what she did at the time. This was about 10 years ago, not sure if anything’s changed. I don’t know that fha cares about that, mortgage insurance sucks though. I’d avoid fha if you can.

Does the upfront mortgage insurance payment last the entire length of the mortgage or is it just for the first year and then returns to a normal amount?


We are speaking with a mortgage broker tomorrow but I would like to have as much knowledge about this first, as possible
 
Don't do FHA if at all possible, PMI never goes away on them. Pretty sure you can get a loan for 3.5% down still. I did in 2011 when I was poor as shit! Still wish I was paying for that house, $1100 month was pretty easy to swing!
 
If you get a conventional mortgage don't be surprised when they sell it to another lender after you've made only two payments and nobody notifies you as to where to send your third payment. (ask me how I know) What a shit show for a couple of weeks trying to sort it out.
 
There are/ can be terms to FHA and pmi, as well as when the "other first home " was bought and circumstances surrounding it I think.

There are programs depending on state and locations that will assist in the purchase as well. Look into USDA-RD and other USDA resources as well

If the government is going to spend the money, get some.
 
FHA is not the deal it was years ago. Inspections are a pain, PMI doesnt roll off (so either refi or sell at 20%). There are plenty of lenders out there doing ~5% traditional loans without the headaches. You still pay PMI but it expires at 20%

Also the PMI rates shot up a few years back. I was on the old plan, coworker on the new. For roughly the same sized mortgage he was paying 2-3x as much in PMI. You want that to go away as fast as possible
 
No idea what the housing market is like in your area but here where houses are selling in hours or days sellers would be crazy to accept an offer with a fha loan.
 
PMI does come off, we had an FHA loan and it dropped off after 5yrs. We got a letter one day from chase, out lender, saying we hit the equity ammount (20%) and it's coming off.
 
We put our house on the market a few weeks ago. Had a crazy amount of showing and offers in 48 hours. One of the offers was and FHA loan, she included a condition that she could come and paint the chipped paint on the garage prior to her FHA appraisal. With 29 other offers hers wasn't even considered.
 
PMI does come off, we had an FHA loan and it dropped off after 5yrs. We got a letter one day from chase, out lender, saying we hit the equity ammount (20%) and it's coming off.

They changed the requirements, PMI is for the life of the loan now.
 
Does the upfront mortgage insurance payment last the entire length of the mortgage or is it just for the first year and then returns to a normal amount?


We are speaking with a mortgage broker tomorrow but I would like to have as much knowledge about this first, as possible

Entire mortgage. Loan changed in 2013 or 2014 so you can’t remove the mortgage insurance and keep the interest rate. You have to refinance.

Conventional loan with mortgage insurance you can get the insurance off when you have 20% equity in the house.

the only reason you’d remove the mortgage insurance and keep the same loan is if you don’t want to refinance to a lower rate. I bought with conventional and insurance and two or three years later home prices were high enough I could get the insurance off. Interest rates also went down so I refinanced.
 
If one coborrower has owned a home, then the first time buyer perks aren’t available.

A good mortgage broker will have alternative loans that are as good or better than FHA loans.

Also, in a competitive buying situation an FHA loan will be a big disadvantage to your offer.

In todays market if you can do anything that is not government backed you have a lot better leverage at getting homes. I have seen government backed loans failed for the dumbest shit. Was part of a USDA loan and they failed the loan for a “Paint chip”. They, the client, asked me to go take some good pictures of the chip for them as we knew it was a paint drip from the soffits being painted. They came back out took a picture of the Drip and said nope it is a chip...

Conventional loans are the way to go if possible in a super competitive market like this one. Probably 50% of all home sales in my area are waving at least 1 if not all contingencies in order to get their offer accepted over the 5 other full price offers.
 
They changed the requirements, PMI is for the life of the loan now.

Yeah you can thank that fucking disastrous Dodd-Frank bill for that. I had to take PMI because I wasn't on the job for 2 years yet. I had FICO over 800, put 22% down, had 70% equity in the rental house, but no, had to take PMI. So I took out a 30 yr loan and refied it on a 10yr when I hit the 2 year mark 9 months later. I figure it cost me something over $20k. "We're from the government and we're here to help." Fuckers.:mad3:
 
Avoid an FHA loan if possible....mostly for the PMI forever. If interest rates were higher, it may be worth considering because chances are you'd refi in a few years anyway if rates dropped. With where they are at now, you will likely never refi, which means you will just pay the PMI forever and never get out of it.

I just bought a house and closed in Feb. I was able to get 2.5% on a conventional loan (contract/locked rate in Dec) with only 5% down. [edit] this is on a 30 year loan [/edit] Realistically the upfront cost of FHA vs. conventional is the same.

With FHA, you may only have to put 3.5% down, but you also have to pay 1.75% upfront on the PMI. Granted, this can be rolled into closing costs and financed with the loan, but it's still upfront cost that you have to pay. With my conventional, 5% upfront and normal closing costs......given rates being so low I will never refi this loan.....but I'm happy to know that the PMI of approx $160/month will fall off after 8 years (max....if I feel the value has increased sooner I can petition to have it removed which will likely have me pay for an appraisal out of pocket).

Just some things to think about....but as said, FHA is no longer the deal it used to be.
 
So it sounds like FHA is no longer a good option and especially if we can get the lowered interest rate with only 5% down. The wife has an 800 credit and im in the 780's, we both have long work histories.

Are currently in our house now but are planning on moving out and into a house with land in a nicer rural area, not the city we are in, but the house needs a 2nd floor added and 1st floor remodeled to fit our family. We have been getting offers to buy our home now for some time because its in a hot market and newly remodeled. Seems the back log on title searches will take longer then to find a buyer.
 
Top Back Refresh