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Personal Finances / Buying or Selling a Home


Subject:  Re: Buying a new home, what type of loan? Date:  3/26/2013  8:07 PM
Author:  CCinOC Number:  125010 of 129250

Get a < 10% down conforming FHA loan with a 30-year term. Insist on an assumable loan for a subsequent buyer. The current mortgage interest rates are almost FREE Money.

Au contraire. The new UFMIP (upfront mortgage insurance premium) effective April 1, 2013 is 2.25% added to the loan amount AND an annual MIP (monthly insurance premium) every month.

Until April 1, 2013, the MIP schedule for new FHA loans is as follows :

15-year loan terms with loan-to-value over 90% : 0.60 percent annual MIP
15-year loan terms with loan-t0-value under 90% : 0.35 percent annual MIP
30-year loan terms with loan-to-value over 95% : 1.25 percent annual MIP
30-year loan terms with loan-to-value under 95% : 1.20 percent annual MIP

There is also a 0.25 percentage point premium for loans which exceed $625,500. Loans of this size are only available in high-cost areas in which the median home price is elevated as compared to national norms.

Fixed rate mortgages are not assumable, so don't bother "insisting" on it.
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