2nd fha loan

7 Replies

Hello all, so im just starting off and doing research while i save my money. Im leaning towards a multifamily with an fha to take advantage of the 3.5% down. If i occupy the home for a year then buy another multifamily will i need to refi the first loan in order to recieve a second fha? and do you think this is a good route for just beginning?

@Dustin Boggs

FHA can be a good idea because of the low down payment, but the loan will cost you. FHA charges two fees, your upfront UMIP and your monthly PMI.

UMIP is 1.75% of the loan amount.  So for a $400k house it is $6,755.  Most people roll this into the loan so you pay interest on it for 30 years.  At 3.75% that will cost you $11,262 over the life of the loan. 

PMI on a $400k house is $273.42 a month so over 30 years it will be $98,431.20 and now the only way to drop PMI is to refi it. So you will either need to pay it down to a 80% LTV or get enough equity in the property to get it to a 80% LTV

You can only have 1 FHA loan at a time unless you have had a qualifying life event (increased dependants, job transfer out of area, ect) but then there are still restrictions and limitations

@Brie Schmidt Thanks for the response so if i get a good deal on the house or i rehab it and increase the value i should be able to refi if i gain enough equity correct? Then i should be able to obtain a 2nd fha right?

@Dustin Boggs

If you increase the value, you can refi it conventional. Then start looking for a new place and buy that with a FHA loan, assuming you lived in your first one for more than 12 months

Originally posted by @Brie Schmidt :

@Dustin Boggs

If you increase the value, you can refi it conventional. Then start looking for a new place and buy that with a FHA loan, assuming you lived in your first one for more than 12 months

This post was very informative, and please look past my ignorance, but when you use the short term "refi" are you referring to refinancing?

@Neil J. Yes when i said refi i was referring to refinancing im learning everything as i'm going too. Ive learned more in the past week on these forums and the podcasts then i ever thought was possible. WEALTH OF INFORMATION 

Originally posted by @Dustin Boggs :

@Neil J.Yes when i said refi i was referring to refinancing im learning everything as i'm going too. Ive learned more in the past week on these forums and the podcasts then i ever thought was possible. WEALTH OF INFORMATION 

That's awesome, I feel the same way.

Definitely one of the best forums I have ever been on!

Thanks

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