MARGARET....... . well, send them my way then.  ;o)  Seriously, I have been doing these kinds of numbers since my 2nd year in the mortgage industry. I had one client that got the same answer from 2 different loan officers, telling them that my way was not saving them money. But what's funny is that this client never got 2 different good faith estimates or any thing in writing. Just the lender saying that they reviewed these figures. I was able to show it on paper and my way was saving the consumer $78 more a month. Numbers only lie if you make them up yourself. I found out that one of the lenders wasn't even VA approved, hence they were comparing VA against a conventional mortgage with 10% down. I had to explain myself 3 times, just because it was 2 against 1. Again, they still never showed this consumer the actual numbers.  SAD, very sad...

FRAN...... .  yes, I know this. I still had loan officer's fighting me on FHA loans over a year ago. And what was funny was that they didn't even do FHA loans. They had themselves sold so badly, brain-washed, just so they could sell their clients on programs that they had and not what they didn't have.

DONNE...... .  thanks for that polite compliment. I love doing the math, when comparing any program with another. The biggest thing that I have found in this business is that most loan officers don't do this.  Read my comment to Margaret. In regards to the realtors that tell their clients this?  Talk about hurting a consumer and their pocket book... I don't like it either... thanks for stopping by.

FRED...... . thanks for the compliment... I was making FHA loans right before subprime loans truly came out of the cracks in 1994. thanks again

JIM....... .  my pleasure and I hope it shows a lot and easy to read.

CHRIS...... . exactly, in regards to conventional loans. It sounds pretty, but in the last year, with the large pricing hits for creedit scores and LTV, conventional didn't compare when you had a 650 and below. But now... even if you have a 679 or below with only 5% down, FHA is still much better.

DONNA....... . my pleasure. Many loans officers can't do this or don't do this. And if they do, many say they do, but never show the consumer side by side. I know this, because when I ask if they showed them anything, even a good faith estimate, they say no... they just told me so...

PAUL aka Texas State Mtg....... .  I'll be the first to admit when I make a mistake. But I also gave you every detail in this scenario.  I don't want to come across rude, but did you read everything that I put in here? 

Let me start with the basics... you bring up YSP and fees. I said that it's zero points with the same exact fees.  Meaning that even with YSP (if I was making 1.4 pts on one, I am making 1.4 pts on the other with YSP), my profit is going to be almost the exact same in monies made, but missing by a few dollars....not much. Just that alone is what I pride myself on when giving scenarios. 

So, question.... when you came up with 6.25% on a 30 day lock, which I did also, did you also take into account that this is a 95% LTV and a credit score of 659????  Because there is a decent penalty of 1.5 pts with some investors and 2 pts with others.

Overall, I would love to hear how you got what you got as a conventional rate with 5% down and a 659 credit score.  Especially since we are talking about investor hits from FNMA.... coming from Wall Street investors... And one more thing.... you told me that I came up with 7.25%??  It says 7.125% and it never changed from the minute that I wrote this.  (again, this might sound rude and I always love a challenge, but it's more than just a rate sheet. You need to look at the penalties)   thanks

PAUL aka Texas State Mtg........ .  Okay, I will say this... I know I didn't make any mistakes and think you did. I checked my work 4 times now. It's not about FHA here. It's that you have penaltys with any FNMA loan with a credit score under 660 and a LTV of 5%.  With a 95% LTV and a credit score of 659, it costs you at least 1.5 pts.  Please tell me what your penalty is for this exact scenario and then maybe we can move forward.

Or are you telling me that you have no penalty for this scenario?  thanks   PS>.. and no, we aren't typing at the same time. My comment was posted at 9:24 pm and your comment was at 9:52 pm.

LARRY..... . thanks for the comment. And yes, there could be a bank offering their own money and porfolio it. But I haven't come across one of those as of yet. Besides, if a lender was going through a bank with such a portfolio, they would not get the same price as that bank anyhow. There would be no profit.

PAUL...... .  I don't know how to put this into laymens terms...but you are missing the whole point to this post. Yes, we need to ask goals, get an idea what a client has to spend and if we can pay down the rates and such. This is not about that at all. Again, please read my post and my comments to you. I said that everything is the same on both sides of the fence.

• Zero points
• same fees
• and same YSP

That right there should tell you that it's not about the rate, but the spread between the FHA rate and the conventional rate. Everytime you came back to give me a convnetional rate, not once did you tell me what your FHA rate was in comparison to the conventional rate. Meaning.... at the end of the day, you would make the same exact money on both scenarios. So what is your FHA rate and what is the convnetional rate, comparing both apples to apples.

Again, you are getting caught up in something that I even expressed, does not matter. It comes down the difference in rate spread, when factoring in the same costs, but the hits for a conventional loan. And the end result.  Put it this way, my example is no points and no fees. 7.125% on a $285,000 convetional is not a high rate at all, when sharing that with you. Does any of this make sense now?

PS>... based on your rate of 6.25% and based on Friday's pricing... please don't use today, because I wrote this over the weekend. You 6.25% with all hits, would cost the consumer about  1.5 pts, correct?  AT least that much, depending on your profit margin and your companies profit margin.

PAUL....  it's obvious that we weren't on the same page. So, I say a term and all you have to offer is .... please....  But yet you don't answer my question anyhow, to compare the rate of 6.25% for a conventional loan to your FHA rate?  It's one thing to get out of wack about how a comment sounds, but then not to even answer the previous comment?  And I won't go further in regards to your response. Just curious to why you still couldn't give me an accurate response.

GHOST Comment....... . yes, comparing apples to apples. This wasn't a hard to understand example. Someone just made it complex, because they were trying to sell rate, not mortgage. And Paul never gave us his FHA rate, to compare apples to apples. And yes, the lower PMI is a huge bonus in itself, let alone the rate.  And I know that 6.25% as of Friday last week was par. Okay, maybe some could be at 6.125%...   but your FHA par rate would be much lower. Gee, I came up with 5.625% on a 30 yr fixed FHA at par....  That is still 5/8% cheaper than a conventional loan. Now, with that in mind, that means that your client would need to come up with an additional $5,000 roughly, just to get that deal. That's not including the down payment and all other regular costs. That is why I use the higher rates.  But that didn't need to be explained in this situation. But Paul had to bring up higher rates.

GERRY...... .   HUH?  I am not looking for politicians in these comments. It's not that confusing. I am not trying to compare MI... MIP... etc, etc. Rates are not equal at all, unless you have to spend a lot more money on the conventional side, no matter how you look at it with a 659 credit score and 5% down. 

A FHA loan will be cheaper in the scenario presented, hands down, no matter how you look at it.

In regards to the UFMIP... I am not 100% sure now. The last I heard, the refund was up until the 2nd of the 3rd year. I will have to check on that. Fred C., did send me a mortgagee letter and told me that it was different, that there is no more MIP refund unless you refinance. I am going to read it tonight. But again, that isn't the gist of this. Even without the MIP refund, this was based on a 5 year scenario, showing that you still came out with a lot of money, even with the UFMIP added into the loan.

Overall, I will just have to assume that Paul made a small mistake about the add-ons to the rate when presented with the fico score and down payment. Besides, he originally told me that I said 7.25%, when my rate was listed at 7.125%. I also said the fees are the same, to set this example up as an apples to apples. He then has to ask me what fees are involved....  okay, so he can buy down the rate. But again, this post wasn't about who can offer the best rate, but when comparing both conventional and FHA, with the same exact fees, points, and YSP, that then FHA mortgage is much better.  A point that was missed very much and has me distured. All realtors or consumers reading this?  This in my opinion, is why so many consumers get the bad idea. Some loan officers try to out-think the other and don't keep their eye on the ball. This was a very simple explanation and someone tried to make it look like that my rates were higher. They aren't. This was based on no fees with zero points.  Hence why I am not shocked why Paul never even mentioned what his FHA rate was. Way off target. And yes, this might sound negative or rude..... but this is why so many just sell rate, but make it sound like they know what they are doing.