FHA help

[Amphiron]

Well, it's been about 20 years since anyone I know has bought their first house and the market has really changed. I would like to get approved, or try to get approved for a FHA. I just don't want to ruin my credit with hard inquires trying to get approved when my credit score is 579, which is bad, but some banks will touch me. Anyways has anyone got a FHA recently? I'd really like to snag up a home while the market is in my price range (35-55k)

[Jeremy C]

I got an FHA last year. Min credit score was 650 IIRC, absolutely no lower than 600 (it is one of those two numbers for sure). I needed 5% down and that meant MIP (not to be confused with PMI, though they are very similar) for 5 years minimum.

[IPD]

christ that's a piss-poor score.

be sure to make ALL your inquiries--no matter where--within a 2-week window. they only hit your credit score once that way.

[Amphiron]

christ that's a piss-poor score.

be sure to make ALL your inquiries--no matter where--within a 2-week window. they only hit your credit score once that way.
Yup but in the last year I have gotten it up from 520 and once I turn in these medical papers it should go up to around 600+. I figure I will keep saving, I have a good down payment saved but I don't want to wait too long and let the housing market turn around on me. Having no health insurance and getting injured in between jobs is what screwed my credit in the first place, I didn't know there were option to opt out of paying if you were low income until recently.

I know I want to get a loan with a fixed rate, is there anything else I should watch out for?

I am also wondering what I will be expecting to pay I want to have a complete picture of what I'm getting into before I take the plunge.

Upfront costs
-Home inspector
-PMI
-MIP

[UTRacerX9]

Minimum Credit Scores for FHA Loans (http://www.fha.com/fha_article.cfm?id=200)

With your score, you'll need to put 10% down. If you don't have 10%, you'll be out of luck. A home inspector can run anywhere from $250 to $700, depending on the size and age of the home. Mine was $500 for a 3600 sq ft home after shopping around for inspectors with good rates. PMI is mortgage insurance... It's an added fee that is tacked on to an FHA loan, that pays into a fund to protect against financial loss in the case of non payment from the borrower. It's based on the value of the mortgage, you'd pay it monthly.

You are right to go with a fixed rate. I have a buddy of mine who got suckered into a variable rate... started at 4%, when the prevailing fixed rate for excellent credit was about 4.75%. Now, he's up to about 10-11%, no joke. He can't refinance because he pays too much of a percentage of his income to his current mortgage... even though a lower fixed rate would obviously help. No banks will let him refinance until he has about 25% equity in the house, and with prices having taken a beating, and with that high rate, it'll be a decade or more before he could be eligible for a lower rate.

[Amphiron]

Well I have close to 10% but I will keep saving. I was told you can expect to pay about 1% monthly of the total cost of your house, so $50,000 house = $500 in your mortgage, taxes, pmi and home owners insurance. The calculators tell the same story.

[IPD]

Well I have close to 10% but I will keep saving. I was told you can expect to pay about 1% monthly of the total cost of your house, so $50,000 house = $500 in your mortgage, taxes, pmi and home owners insurance. The calculators tell the same story.

sounds about right...but it varies depending on the term of the mortgage. i have an 88k loan on a 15 year that i'm paying ~$880 per month on. that would likely drop below 600 on a 30 year.

[Amphiron]

I want to do a 15 year plan, but if I have to a 30 year plan then so be it. Anyways whats with closing costs?

[IPD]

I want to do a 15 year plan, but if I have to a 30 year plan then so be it. Anyways whats with closing costs?

if you have tight finances, 30 year is probably the way to go. one of the drawbacks to a 15 year (or 10 year) is that you simply cannot recoup your monthly cost via rent--if you rent it at a later date. i'm currently shelling out about $200 per month in addition to the rent i'm collecting on the house...just to pay the mortgage. that's not a problem for me...but it might be for some people. i did get hosed with a high fixed-rate (6%)...but it could have been a lot worse. i also only put 5% down on the house, and because i hadn't hit the arbitrary 25% principle paid--it would have cost me a LOT to refinance.

many places will allow you to roll some of the costs (closing, etc) into the loan itself. normally i suggest its better to pay those out of pocket, but if you are having a hard time trying to scrounge up the down payment, then perhaps it's not a bad way to go.