Okay, have you ever wondered, or have you ever compared the programs available to see who's got the lowest payment?
especially if you're a first time homebuyer
I'm going to use as a basis a purchase price of $125,000 and an interest rate of 4.75% for all examples
let's start with
there's 3 different VA categories I will address;
if you're using your eligibility for the first time it's 2.15% for the funding fee
so with the funding fee the mortgage is $127,687 and the P&I is $666.08
if you have used your eligibility previously the funding fee is 3.3%
so with the funding fee the mortgage is $129, 125 and the P&I is $673.58
if you have a VA related disability the funding fee may be waved
so with no funding fee the mortgage is $125,000 and the P&I is $652.08
(that could be it-the lowest payment-we'll see)
this alters the comparisons a bit in that FHA requires a 3.5% down payment, in this case $4375.
so the base mortgage amount is $120,625 but
the mortgage amount with the upfront MIP is $122,735 and the P&I is $640.24
AND to this example we need to add the annual MI
the annual MI for this example, based on a rate of 1.35% is $138.08
so the total payment is $778.32
my final example is
the upfront guarantee fee is 2% and the annual fee is .4%
so I'll use a mortgage amount of $127,500 and the P&I is $665.10
and the annual/monthly fee is $42.50
so the total payment is $707.60
so what's the conclusions;
we have got to be asking potential homebuyers if they are Veterans because their options are outstanding, particularly if they have a VA related disability, and may qualify for 100% financing, with no funding fee or MI of any type
we cannot discount or ignore the USDA/Rural Housing option (where available) as in this example the payment is $70 ish less than FHA.
and finally while FHA may generate the highest payment it has guidelines which are helpful to the buyers, particularly it's acceptance of down payment and closing cost assistance programs.