Any better options then fha loan to do a house hack

11 Replies

I spoke with a td lender and he's telling me he can get me a mortgage for 3% down and pay no mortgage insurance.

He said theirs no owner occupant issues has any body ever get offered sumthing better then a fha or is their stuff he's not telling me 

You might not be paying MI/PMI per se, but you're paying for it by way of a higher interest rate. It's called Lender-paid MI (LPMI.) Compare 2 or 3 lenders to see what your total costs and APR would be.

Ur saying theirs also a lender insurance that he failed to mention?

Carefully look over the fees associated with this "no PMI" loan. I was offered a similar loan and a competing lender explained to me how they do it. Traditional PMI can be removed once 20% principal is reached. The "no PMI" loan pays an insurance fee over the life of the loan, once 20% is reached the PMI goes away for the lender and the insurance fee money goes right into the lenders pocket. This was the quick and dirty explanation that I was given, I have not verified it as I did not used the "no PMI" loan so verify.

Originally posted by @Chris Breezy :

@Michael Cohen I was told I can get 3.6 percent compared to fha which would around 4.0

There's no way your interest rate is going to be 3.6% nowadays. Or even 4%. For a 30yr fixed 3.5% down multiunit (assuming 740+ credit) you're looking at around 4.5% to 4.75% depending on the market when you lock.  If you're score is less than 740, assume a higher interest rate.   The only way to get interest-rate anywhere near that point right now for what you're looking to do, is to pay a lot in points. Have you seen any sort of closing cost estimate?

 I don't know the whole situation,  and it's possible there was just some simple miscommunication, but I'm concerned over what you're saying. I strongly urge you to connect with a few other lenders. 

Originally posted by @Chris Breezy :

Ur saying theirs also a lender insurance that he failed to mention?

Lender – paid, meaning they're paying the MI on your behalf and then charging you a higher interest rate in exchange for doing so. 

I am in the process of going through a FHA loan myself and things you must know is: if you get any kind of mortgage that your putting less then 20% down, YOU WILL have some sort of PMI or mortgage insurance.

@chris breezy

@Chris Breezy , Join the military and earn access to the VA loan. As they guys above have said though, there in no such thing as a free lunch.

Just got quoted a 30yr fixed loan today @ 5% down, no pmi, no points, 4.125%, $1200 loan costs @300k purchase price.

I'll leave it to you to decide if that's better than an FHA for your situation but there's some market context.

@Malick Guindo GuaranteedRate. Used them for a couple properties now and they've been fast, easy, & had good rates.

Not a huge NY presence (bought 1 NY property through them), bigger out in my area.

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