FHA vs Conventional. 3% vs 5% plus down payment. Short Sales and Foreclosures. ?

We want to buy a home right now before rates increase due to more foreclosures filling up the market, and before laws get into place that make it harder to get a mortgage.

My husband and I were preapproved for two types of mortgages: FHA and Conventional. I want to know what is pros and cons of each and what is the best for us?

We are looking for homes between 0-5k. Whats most vital to us is to get a really low rate (we have above 714 credit). We prefer putting 3% down, but we could place 5% down if that means we get a lower rate. We want to have the seller pay for parts of the closing cost, but again we would be willing to pay this too if this means we will get a lower rate.

Last question is the process of small sales and foreclosures. If let’s say a house’s market value is 0 but a bank approves for us to buy it at 0k, does that mean we immediately own 20% of the home? If so, does that mean we don’t have to pay PMI or MIP? How does this differ with FHA and Conventional? Should you or can you question for less on small sales and for foreclosures if that is the market right now, regardless of how much the previous seller owns on it? Does that mean we won’t get it?

Sorry for all the questions! I hope you guys can answer all, or if not, parts of this! Also, any other suggestions for me in regards to the homebuying process would be wonderful! Thank you!

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Tags: closing cost, FHA, FHA Foreclosure, foreclosures, homebuying process, last question, mortgage, mortgages, pros and cons, s market

This entry was posted on Tuesday, June 30th, 2009 at 1:04 am and is filed under FHA Foreclosure. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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2 Responses to “FHA vs Conventional. 3% vs 5% plus down payment. Short Sales and Foreclosures. ?”

Jang says:

June 30, 2009 at 1:04 am

there is no more 5% down on conventional loans. the minimum is 10% on a conventional loan and that includes PMI. 15% down then you dont have to pay PMI… but loan products change daily so you have to check often with your lender.
FHA i heard is increasing to 3.5% downpayment.

with regards to rate, there is not much difference between the 2.
with regards to conditions, there is a huge difference between the 2. FHA requires a lot of conditions to be met on the property you are buying so you should do your homework on that.

buying a home less than its appraised value doesnt necessarily mean you already own a %tage difference of that. loan products require you to be paying (if with PMI) up to a certain number of years before you really check to see if your remaining loan amount is enough to remove the PMI on your loan.
FHA vs Conventional. 3% vs 5% plus down payment. Short Sales and Foreclosures. ? | Foreclosures For Profit says:

June 30, 2009 at 1:34 am

[...] Read the original here: FHA vs Conventional. 3% vs 5% plus down p&#173… [...]

Tags: closing cost, FHA, foreclosures, homebuying process, last question, mortgage, mortgages, pros and cons, s market,

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