From the Desk of Bob Caldwell

FHA vs. Conventional Mortgage Insurance

With the FHA upfront mortgage insurance premium increase from 1% to 1.75% and monthly insurance premium of 1.25m is FHA the clients with minimum down payments ?

Purchase Price

FHA: $250,000

Conventional: $250,000

Downpayment

FHA: $8750

Conventional: $12,500

Loan Amount

FHA: $245,471

Conventional: $237,500

Upfront Mortgage Premium

FHA: $4221.88

Conventional: Zero

Interest Rate/(APR)

FHA: 3.75% (4.773%)

Conventional: 4% (4.523%)

Monthly Mortgage Insurance

FHA: $249.20

Conventional: $131.54

Est. Cash to Close

FHA: $13,589.11

Conventional Loans: $17,289.47

Est. Monthly Payment

FHA: $1,386.01

Conventional: $1265.40

BENEFITS OF FHA

--Flexible Credit Requirement

--FHA interest rates often priced lower than Conventional

--Gift fund are permitted

--Debt to Income ratios more flexible

BENEFITS OF CONVENTIONAL

--Lower Monthly mortgage insurance premium

--Premium Reduction at 78% LTV only 2 years required

Like FHA, 1st time homebuyer & bond programs available

--Up to 97% LTV available with certain restrictions*

*Note: Rates and programs are subject to change due to unforeseen market conditions, borrrower's credit profile and eligibility requirements. All payments are based on 360 monthly payments; total obligation could be higher. For more questions contact Bob Caldwell.

Copyright 2012 Bob Caldwell