Homepath Financing??

Question

HI have offer in on fnma homepath property was going conventional but wondering if i should consider homepath financing because i would only need 10 percent down instead of 20. and no pmi or appraisal. But heard they charge lots of fees and your interest rate is higher? has anyone done the homepath financing for a investment property if so was it a bad or good deal?

Ken Frauenthal · Answer

I think I mentioned it in your other post, but I was able to get about 5% on one and 6% on the most recent one.  I did have to raise my bid to offset that, but they were both accepted.

Good luck!  I think FNMA is a great deal.  I'd also try to ask for additional repair concessions after you're under contract and do a home inspection - it never hurts!

Ron S. · Answer

Thanks Ken  doesnt sound bad   I like the idea of using less money to get in and asking for seller concessions to offset some fees. The properties that i am bidding on are in the 50k range so a small interest rate hike isnt going to make much difference in payment. Also how much did you get back 3 percent concessions???

Ken Frauenthal · Answer

One other thing - I don't know where you're looking to buy, but I've been buying in Miami, and FNMA is EXCRUCIATINGLY SLOW if you use seller choice of title company trying to save a few bucks.  I made that mistake the first time, and thought it was a fluke this second time; I elected to pay and switch halfway when the title company finally failed to perform.

If my most recent deal closes when they say, it will have taken about 4 months from the date the offer was accepted (there are already been 2 extensions due to title delays).  My first deal took close to 5 months to close.

Ken Frauenthal · Answer

I've done one homepath deal, and am waiting to close on another.  I haven't looked at it recently, but I think the fees came out around 3-4% of purchase price.  I had a friend who also purchased one, and said his were about that also.  Both deals I asked for cash back at closing from FNMA, which helped pay all the fees.  I did have to bid a bit more, but the numbers worked.

Another thing to consider, is that typically your loan will have a slightly higher interest rate than what you could get for a conventional loan.  Depending on the price of the place you're looking at, this might/might not make a big difference.  I've been purchasing around the 60-80k range, so it wasn't significant.