Home Purchase Mortgage Options With 15% Down Payment FHA or Conventional Loans?
Hi everyone, I’m a first time home owner and have no experience with home buying terminology. I do have a realtor at this time.
I’m looking to buy a single family home for about $ 250K – $ 300K max, prefer somewhere in the middle around $ 285K. My credit score is 784 from all 3 credit agencies. I have $ 60,000 cash for down payment. I have $ 0 debt. No car payment and Rent is $ 500 a month (rent a room). I own a $ 30,000 car and $ 5,000 car free and clear. My annual income is $ 60,000+ . I have been asking around and it doesn’t seem like I will be having trouble getting a loan.
I was looking at the FHA and conventional loan. since my down payment budget is $ 60,000. If I were to purchase a house with conventional loan of purchase price $ 285K and 20% down payment would be $ 57,000 that would leave me $ 3000 for closing cost which is cutting it really close. I was thinking about putting down 15% on a FHA loan $ 42,750 which would leave me $ 17,250 left for closing cost and MIP. The upfront MIP will be 0.0175 of the loan amount $ 24,2250 which will be $ 4240. I believe under the new FHA MIP I will have to pay the MIP monthly for 5 years until I can get the house appraised and have MIP removed. The monthly MIP will be $ 112 for 60 months that would be $ 6720. So basically if I go with FHA 15% down I will have to pay a total of $ 10960 for Mortgage Insurance.
What if I go with a traditional loan and put down 15% and get PMI for 2 years. So my confusion is should I do MIP or PMI if I only want to put 15 % down ? If you guys have any other suggestions please let me know. Thanks