The Goat Spot Forum banner

1 - 10 of 10 Posts

·
Registered
Joined
·
2,080 Posts
Discussion Starter · #1 · (Edited)
Just posting this in the hopes that someone else has gone through this and might be able to help find a way around this...
We are in the process of purchasing our first home. We were applying for a fha loan as we have to have a non-occupying co-borrower. At first we were told we would need mortgage insurance if we did not have 20% down. Soo we came up with the 20% so we did not have to pay that. But now we are told there was a new law and we are required to pay the mortgage insurance for the lifetime of the loan because we have a co-borrower. I just do not understand all this at all. We are putting the 20% down, so how is this unlike someone with a conventional loan, the bank has the same amount of money either way?
If we have to carry the mortgage insurance for the lifetime of the 30 year loan we would end up paying $52,560 in insurance.
 

·
Premium Member
Joined
·
29,236 Posts
I would check with another lender. We are going through a similar situation but were able to get away with not having to have a co- signer (or co - borrower) through one banks new home buyer program (susquehanna bank) and there is no mortgage insurance with this program! and only 3% down! What a God send!

We were being told "check with us next year" until we found this bank. So I would be sure to check out other banks/lenders to be sure this is truth and you arent actually being played.
 

·
Goatless goat momma
Joined
·
7,887 Posts
I agree. check with other banks, and maybe talk to some mortgage brokers. I'm not really sure about how the mortgage system works in America, but what they're saying sounds sketchy to me.....
 

·
Premium Member
Joined
·
29,236 Posts
I know FHA changed their rules that if you dont put 20% down you carry insurance for the life of the loan (instead of until like 70% of it is paid off). They could have made this change with the co-borrower and you might be better off getting a conventional loan WITH a co-borrower. Which I dont know why you would need a co-borrower if you are putting 20% down (unless it has to do with your credit score).
 

·
Registered
Joined
·
1,920 Posts
Talk to mortgage investors group http://migonline.com/

We love our agent and they are very fair with us. We just got through all the paper work for having the appraisal ordered so we still have a ways to go but they have been great. We are doing the rural home loan which doesn't require any money down. Rural home loans take at least 45 days to close, but we are also doing a gift letter from our parents to help get the payment down in our price range. So that brings it to taking about 60 days to close. Our agent told us you could do a 20% down in order to get out of the PMI but anything less then that you would still have the PMI included in your loan.

Hope this makes since and good luck! Congrats!
 

·
Registered
Joined
·
2,080 Posts
Discussion Starter · #7 ·
We had hard enough time finding someone to work with us at all because 1. we are self employed 2. we are moving out of state and moving our business. So at this point I don't think changing lenders is an option, and we need to close by aug 20th.
We have excellent credit, we just do not show enough income on paper being self employed, therefore do not qualify for the loan needed to get a farm. So why we have a non-occupying co borrower. What the mortgage guy told us, is that we can refinance into a conventional loan after a year, but that is IF we can qualify then which is probably unlikely. I was just hoping someone new of some loop hole who we could get out of the mortgage insurance. I just don't understand how our 20% is any different that another person with a conventional loan. It is still the same amount of cash that the bank is guaranteed plus there is a second person on the loan in the event we would default on the loan.
We had originally tried to get a farm or rural loan but did not qualify as we are moving out of state.
 

·
Registered
Joined
·
2,080 Posts
Discussion Starter · #8 ·
From what we were told only fha loans are allowed co-borrowers, not conventional loans.
 

·
Registered
Joined
·
635 Posts
Co borrowers always make a mortgage riskier in the view of the lender.
 

·
Member
Joined
·
8,161 Posts
My dh had the FHA home loan- with the mortgage insurance. He made extra payments and paid off the 30 yr. loan in 13 yrs. Yes, he did have to pay the mortgage ins. each month,
but, by paying off the loan early the bank didn't get $53,000 in interest payments! It sounds like you may be stuck with the mortgage insurance, but you might be able to prevent them
from getting all the extra interest if you can make an extra payment occasionally! (Just make sure there is no penalty for paying it off early!)

Good luck to you!
 
1 - 10 of 10 Posts
Top