Questions about a FHA loan, Mortgages, and first time buyers?

May 21st, 2010
by admin.

I will be a first time home buyer, I am looking in NJ, now living in NY. I take home, after taxes about 8k a month, my wife also brings in a few thousand a month. We have great credit and no outstanding bills except a few student loans. To find something in the area we want, we will have to spent about 700k or so. I have read that with a FHA loan you have to put down 3.5 % as compared to 20% with a regular mortgage. If you take out a FHA mortgage and put down the 3.5 % do you still have to pay PMI with a FHA ? Also, where should I go for a mortgage, I hear many bad things about brokers, And, the last thing, what am I looking at in fees and closing costs for this range ?

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3 Comments

  1. maxmom56 says:
    May 21, 2010 at 1:28 pm

    You pay PMI and you pay all closing costs. The banks are on the website – fha.gov.

  2. godged says:
    May 21, 2010 at 2:11 pm

    Unless you put 20% down, you are going to pay PMI.

    I would strongly suggest that you work with a local lender. I’d start with where you do your banking. Internet lenders have no vested interest in making sure you are satisfied or close on time because their business is not driven by referrals. In my very limited experience with internet lenders, it has never gone well. Local lenders rely on referrals for repeat business, and might run into you at a local store, so they want you to be happy.

    When shopping for a lender, ask for a GFE (good faith estimate) of closing costs. Of course you are going to want to know your interest rate, but lenders can vary by thousands of dollars in closing costs. Ignoring closing costs can be expensive.

    Speaking of closing costs, a figure to work from is 3% of sales price.

    Good luck on your purchase.

  3. Red says:
    May 21, 2010 at 2:32 pm

    It’s MIP for an FHA loan and yes, it will be included in your payment I don’t think they loan that high. Last I heard, there was a cap of 250K. If you have good credit then there isn’t any use going through a mortgage broker — unless you want to pay thousands more of closing costs. Like any product you purchase, shop around and questions of Lenders — get loan fees, charges, and costs up front. FHA only allows certain fees to be charged so check out their website too.

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