do you want the lowest payment or not?

By
Mortgage and Lending with Fairway Independent Mortgage Company 385907

Well do you?

If you do then how come Homepath continues to get such an undeserved

Bad Rap

okay now you're going to need to be smart about this, because not only will you get a lower payment, you'll like the other benefits too.

I just priced a $125,000 purchase price for both Homepath and FHA and, wow what a difference in the note rate.

FHA was 4.25% with no points and Homepath was 5.375%.

Well that should end it right there, right?

not so fast now.

Because there's another very big factor

Homepath does not have MI...No unpfront MI, and No annual MI

Hmmmm

where's he headed here

So to start off with FHA has a larger downpayment, and on a $125,000 purchase price it's $625. Okay not a lot, but for first time homebuyers $625 bucks is well $625

Now, add on 1.75% for the upfront MI for FHA.

The mortgage amount for FHA is now $122,735, and the mortgage amount for Homepath is $121,250.

The P&I for FHA @ 4.25% is $603.78, and the P&I for Homepath @5.375 is $678.97

Now...Drumroll please.

to the payment for FHA you must add the monthly MI premium of 1.35%, to Homepath nothing.

the monthly MI payment is $138.08, and the P&I is $603.97.

the total FHA payment is $742.05, and the Homepath payment is still $678.97.

isn't math a wonderful thing?

Okay, I promised you more, so here it is;

Homepath does not require an appraisal. The purchase price is the value. Done, that's it. No messin with it at all.

Oh ya, that's a savings of $425

hmmm

let me ask you, are your first time homebuyers tired of competing for properties with cash buyers? well Homepath has

First Look

this allows the first time homebuyer to have 15 days before other buyers can bid on the property.

that's pretty cool if you're a first time homebuyer.

so you've got to give Homepath some consideration.

Now, I've been a mortgage lender, well forever, or so it seems, and I firmly believe that FHA has put more first time homebuyers in homes than any other program. I'm telling you I don't even believe it's close.

But, in today's market you need to keep all of you options open, so don't immediately dismiss Homepath because the note rate is higher. After all I need to know...

do you want the lowest payment or not?

 

close

Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Chuck Carstensen 08/04/2013 01:48 PM
Topic:
Lending / Financial
Location:
Florida St Lucie County
Groups:
Keller Williams 'Rainers
Century 21 Network
RE/MAX Active Rain Bloggers
1st Time Buyers
Posts to Localism
Tags:
martin county loan officer
port st lucie loan officer
martin county mortgages
indian river loan officer
port st lucie mortgages

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Rainmaker
2,348,683
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Buyers get overly focused on rate and forget about all the other stuff from mortgage insurance to lender costs, etc. As agents, we need to encourage to look at the total bottom line.

Aug 04, 2013 09:53 PM #12
Ambassador
1,611,302
Harry F. D'Elia
Real Estate and Beyond, LLC - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

The home buyer has many options when it comes to financing. The FHA is the best loan on the market. I bought my first home with FHA.

Aug 04, 2013 10:04 PM #13
Rainmaker
275,477
Jay Beckingham
Fairway Independent Mortgage Company - Delray Beach, FL
"I love first time homebuyers"

Nina,

I couldn't agree more, and as lenders we need to make sure they know their options.

Harry,

 

I don't disagree, but for some not necessarily their best option.

thanks

jay

Aug 04, 2013 10:21 PM #14
Rainmaker
1,322,992
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Jay, this is what first time buyers need to hear. The lowest interest rate doesn't necessarily mean the lowest payment. Good information for buyers to know.

Aug 04, 2013 10:56 PM #15
Ambassador
1,857,077
Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

Homepath is a great tool for many buyers out there. . I hope it catches on!

Aug 04, 2013 10:59 PM #16
Rainmaker
1,861,774
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

No spin zone, looking out for all of us on this one.

Aug 04, 2013 11:13 PM #17
Rainmaker
421,091
Drick Ward
NEPTUNE REALTY - Virginia Beach, VA
"RealtorDrick" - Experienced Representation

Thanks for the information

Aug 04, 2013 11:25 PM #18
Rainmaker
2,258,572
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Good post and comments...Real Estate remains rewarding with an good agent to consult with

Aug 05, 2013 12:16 AM #19
Rainmaker
647,109
Team Honeycutt
Allen Tate - Concord, NC

Great post.  You make some excellent points. As in most cases, we need to look at the whole picture before making a decision.

Betty

Aug 05, 2013 12:59 AM #20
Rainer
219,618
Suzanne Otto
Six Twenty Designs - Lansdale, PA
Your Montgomery County PA home stager

People can't just take interest rates into account when purchasing a home. There are so many factors involved which is why they should consult with an expert such as you!

Aug 05, 2013 01:03 AM #21
Rainmaker
939,185
Gary Frimann
Eagle Ridge Realty / Signature Homes & Estates - Gilroy, CA
REALTOR and Broker

Well, that's an expert analysis.  I rarely see Homepath in my area, but it is great info to know, as I do come across them once in a great while.  Thanks for the example and explanation.

Aug 05, 2013 01:47 AM #22
Rainmaker
275,477
Jay Beckingham
Fairway Independent Mortgage Company - Delray Beach, FL
"I love first time homebuyers"

Michael,

I agree, they need to find good Loan Officers that they can trust who'll explain the options.

Fernando,

it's been available for quite awhile. I guess it's a secret.

Andrew,

I know that a Mainer appreciates the straight talk.

Drick,

you're welcome,

Richie,

we need to know what tools are available

Betty,

the whole picture is correct, it tells the whole story.

Suzanne,

thank you for the kind words, we're in a market where we need to know and use all the tools available.

Gary,

go to Homepath.com and check out the properties in your area. you may be surprised.

 

thanks all

jay 

Aug 05, 2013 02:18 AM #23
Rainmaker
1,143,923
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Jay:  The upfront, non-disappearing mortgage insurance (changes) are huge.   You prove exactly why it's important to consider ALL options and have an analysis worked-up by your Lender regarding each.  Only then do you get a true picture of your best options and how to proceed wisely ...

Gene

Aug 05, 2013 02:52 AM #24
Rainmaker
365,938
Travis "the SOLD man" Parker; Associate Broker
Team Linda Simmons, Enterprise, AL 36330 - Enterprise, AL
email: Travis@theSOLDman.me / cell: 334-494-7846

I haven't done a HomePath mortgage yet, but with FHA adding so many little "extras", if you can get a Conventional for 5% down, the overall figures seem to be close. I was talking to a Loan Officer on Friday who said she would sit down with this week and go into more detail on the comparisons.

Aug 05, 2013 03:16 AM #25
Rainmaker
275,477
Jay Beckingham
Fairway Independent Mortgage Company - Delray Beach, FL
"I love first time homebuyers"

Gene,

I had a client laughing at closing talking about a higher rate generating a lower payment. you know higher is lower.

I now refer, in my presentation to first time home buyers and Realtors, to the "effective rate"

rate plus MI and/or the lack thereof.

Travis,

for first time homebuyers Homepath is 3% down.

thanks gentlemen

jay 

Aug 05, 2013 03:28 AM #26
Rainmaker
592,340
Than Maynard
Coldwell Banker Heart of Oklahoma - Purcell, OK
Broker - Licensed to List & Sell - 405-990-8862

The numbers never lie. With the idiotic amount for the monthly PMI, Homepath has become competitive.

Aug 05, 2013 03:35 AM #27
Rainer
72,370
Brian DeYoung
Howard Hanna Real Estate Services - Ithaca, NY
Brian DeYoung

I LOVE MATH,

and i love that you laid thia all out. Best blog i have read in at least a week.

One of the best in a long time. Fantastic.

Aug 05, 2013 03:54 AM #28
Rainmaker
275,477
Jay Beckingham
Fairway Independent Mortgage Company - Delray Beach, FL
"I love first time homebuyers"

Than,

I agree that the FHA MI is higher than we've seen in a while, but we still need the program. we need all the options possible.

Brian,

thank you for the kind words. usually it's easier for me to understand and explain when I work it out..

 

Thanks

jay

Aug 05, 2013 04:13 AM #29
Rainer
284,268
Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

Jay -- the other item that can help people understand the program is that your $125,000 purchase with a  4.25% FHA loan now sports an APR of about 5.685%.   That can scare some folks off, and show the HomePath to be more competitive on APR than one might initially think.

Aug 05, 2013 06:46 AM #30
Rainmaker
275,477
Jay Beckingham
Fairway Independent Mortgage Company - Delray Beach, FL
"I love first time homebuyers"

Steven,

 

you are correct, but not many people truly understand the APR.

 

thanks

jay

Aug 06, 2013 07:06 AM #31
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Jay Beckingham

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