Sorry more mortgage questions... Help!!!

Today I spoke with a mortgage banker and now I am even more confused...

Those with an FHA loan... Do you have to pay PMI for the life of the loan?

Has anyone rolled closing cost into your mortgage?

Is it common for the seller not to accept an offer because closing cost are rolled in?

Did you get pre-approved before you found a house?

Wen does a rate get locked in?

Ideally my DH and I would like to roll our closing cost into a conventional mortgage and from there put 10-12% down. Although it isn't 20% I thought it was a solid down payment. After speaking to the mortgage guy... I'm second guessing everything.

Am I better off going with a traditional bank vs mortgage bank?

Sorry for all the questions. I'm lost

Re: Sorry more mortgage questions... Help!!!

I think if you are confused, you should definitely speak further with the mortgage loan officer you contacted, and/or contact someone else to get more/better information. Let me know if you need any recommendations on mortgage lenders/loan officers.

The rules re: FHA loans just changed, but yes, now borrowers will have to pay pmi for the life of the loan (unless they refinance with a conventional road down the line). With an FHA loan, you used to be able to apply to get the pmi removed after 5 years if you had 22% equity in the house, but that has been done away with.

I have done many transactions where buyers have rolled closing costs into the mortgage. With an FHA loan, you can roll up to 6% of the purchase price into the mortgage. With a conventional loan, it depends on how much cash you are putting down. With more than 10%, I believe you can roll in 6%, too (less than 10% down, I think you can only roll in up to 3%). But with a conventional loan, you will still be paying pmi if you don't put 20% down, as I am sure the mortgage banker told you.

I wouldn't say it's common for the seller to reject an offer because the buyer is rolling in closing costs (which is called a "seller's concession). It's an extra term to be negotiated. The downside for the seller is that there's more risk that the house won't appraise (because it needs to appraise for the full contract price, INCLUDING the closing costs). So if you agree to pay the seller $300K for his house, the house will still need to appraise for $318K (the $300K + 6%). In a more competitive market where multiple offers are becoming more common, a seller may opt for an offer where there's no seller's concession involved. But a way around the seller's concerns is always to make clear that if the house doesn't appraise for the amount that includes the closing costs but appraises for the price the seller is getting, the buyer can come up with the extra cash to cover the closing costs (assuming this is the case). Some people opt to do the seller's concession to conserve cash even though they don't NEED to. You may be better off putting down less and conserving more cash. Even with a conventional loan, I've had buyers put as little as 6% down, but you need sterling credit and a great debt to income ratio.

You must get preapproved and have a preapproval letter before you put an offer on a house. Otherwise, the seller/listing agent won't even consider your offer, and any good real estate agent won't show you houses. The financing should be worked out upfront, before you find the house. But a preapproval doesn't lock you in to using a particular lender. You can always go with another bank once you find the house.

Rate gets locked in after you are in contract and you anticipate closing soon. Usually rate locks are only good for 30 days, and for a longer lock, it often costs you somewhere, somehow.

I always advise my clients to go with a mortgage bank instead of a large commercial bank. Local mortgage banks such as U.S. Mortgage Corporation and Continental Home Loans are great -- in general, they are faster than commercial banks, have better customer service, more knowledgeable personnel. I think larger banks don't put much resources toward their mortgage business anymore. Of course, I think a lot depends on the particular people you are working with at any lender.

Hope this helps! Good luck. If I can help you with your search, please feel free to contact me.

Sorry more mortgage questions... Help!!!

I thought the new FHA rules state that you would pay PMI for 11 years for 30 year loans and for the life of the loan for 15 year loans?

Sorry more mortgage questions... Help!!!

I was told that the PMI change (5 years/20% equity vs life of mortgage) is for any FHA loan with a case number dated after 6.3.13.

There was an increase in the PMI rate depending on if it was a fixed 15 or 30 year mortgage.

Re: Sorry more mortgage questions... Help!!!

Sorry more mortgage questions... Help!!!

Thank you all for your replies. TRUST me it's greatly appreciated.

Re: Sorry more mortgage questions... Help!!!

from what i hear FHA take longer to close and fees and PMI much higher, we did conventional did not roll in closing fees w/ 5% down w/ pmi for whatever the time frame was i think till 20% paid off, pmi rates are lower on conv than FHA.

Re: Sorry more mortgage questions... Help!!!

Re: Sorry more mortgage questions... Help!!!

Re: Sorry more mortgage questions... Help!!!

Posted by Century 21 Dallow - Christine Braun

I think if you are confused, you should definitely speak further with the mortgage loan officer you contacted, and/or contact someone else to get more/better information. Let me know if you need any recommendations on mortgage lenders/loan officers.

The rules re: FHA loans just changed, but yes, now borrowers will have to pay pmi for the life of the loan (unless they refinance with a conventional road down the line). With an FHA loan, you used to be able to apply to get the pmi removed after 5 years if you had 22% equity in the house, but that has been done away with.

I have done many transactions where buyers have rolled closing costs into the mortgage. With an FHA loan, you can roll up to 6% of the purchase price into the mortgage. With a conventional loan, it depends on how much cash you are putting down. With more than 10%, I believe you can roll in 6%, too (less than 10% down, I think you can only roll in up to 3%). But with a conventional loan, you will still be paying pmi if you don't put 20% down, as I am sure the mortgage banker told you.

I wouldn't say it's common for the seller to reject an offer because the buyer is rolling in closing costs (which is called a "seller's concession). It's an extra term to be negotiated. The downside for the seller is that there's more risk that the house won't appraise (because it needs to appraise for the full contract price, INCLUDING the closing costs). So if you agree to pay the seller $300K for his house, the house will still need to appraise for $318K (the $300K + 6%). In a more competitive market where multiple offers are becoming more common, a seller may opt for an offer where there's no seller's concession involved. But a way around the seller's concerns is always to make clear that if the house doesn't appraise for the amount that includes the closing costs but appraises for the price the seller is getting, the buyer can come up with the extra cash to cover the closing costs (assuming this is the case). Some people opt to do the seller's concession to conserve cash even though they don't NEED to. You may be better off putting down less and conserving more cash. Even with a conventional loan, I've had buyers put as little as 6% down, but you need sterling credit and a great debt to income ratio.

You must get preapproved and have a preapproval letter before you put an offer on a house. Otherwise, the seller/listing agent won't even consider your offer, and any good real estate agent won't show you houses. The financing should be worked out upfront, before you find the house. But a preapproval doesn't lock you in to using a particular lender. You can always go with another bank once you find the house.

Rate gets locked in after you are in contract and you anticipate closing soon. Usually rate locks are only good for 30 days, and for a longer lock, it often costs you somewhere, somehow.

I always advise my clients to go with a mortgage bank instead of a large commercial bank. Local mortgage banks such as U.S. Mortgage Corporation and Continental Home Loans are great -- in general, they are faster than commercial banks, have better customer service, more knowledgeable personnel. I think larger banks don't put much resources toward their mortgage business anymore. Of course, I think a lot depends on the particular people you are working with at any lender.

Hope this helps! Good luck. If I can help you with your search, please feel free to contact me.

Re: Sorry more mortgage questions... Help!!!

Posted by Jenn79

Posted by Century 21 Dallow - Christine Braun

I think if you are confused, you should definitely speak further with the mortgage loan officer you contacted, and/or contact someone else to get more/better information. Let me know if you need any recommendations on mortgage lenders/loan officers.

The rules re: FHA loans just changed, but yes, now borrowers will have to pay pmi for the life of the loan (unless they refinance with a conventional road down the line). With an FHA loan, you used to be able to apply to get the pmi removed after 5 years if you had 22% equity in the house, but that has been done away with.

I have done many transactions where buyers have rolled closing costs into the mortgage. With an FHA loan, you can roll up to 6% of the purchase price into the mortgage. With a conventional loan, it depends on how much cash you are putting down. With more than 10%, I believe you can roll in 6%, too (less than 10% down, I think you can only roll in up to 3%). But with a conventional loan, you will still be paying pmi if you don't put 20% down, as I am sure the mortgage banker told you.

I wouldn't say it's common for the seller to reject an offer because the buyer is rolling in closing costs (which is called a "seller's concession). It's an extra term to be negotiated. The downside for the seller is that there's more risk that the house won't appraise (because it needs to appraise for the full contract price, INCLUDING the closing costs). So if you agree to pay the seller $300K for his house, the house will still need to appraise for $318K (the $300K + 6%). In a more competitive market where multiple offers are becoming more common, a seller may opt for an offer where there's no seller's concession involved. But a way around the seller's concerns is always to make clear that if the house doesn't appraise for the amount that includes the closing costs but appraises for the price the seller is getting, the buyer can come up with the extra cash to cover the closing costs (assuming this is the case). Some people opt to do the seller's concession to conserve cash even though they don't NEED to. You may be better off putting down less and conserving more cash. Even with a conventional loan, I've had buyers put as little as 6% down, but you need sterling credit and a great debt to income ratio.

You must get preapproved and have a preapproval letter before you put an offer on a house. Otherwise, the seller/listing agent won't even consider your offer, and any good real estate agent won't show you houses. The financing should be worked out upfront, before you find the house. But a preapproval doesn't lock you in to using a particular lender. You can always go with another bank once you find the house.

Rate gets locked in after you are in contract and you anticipate closing soon. Usually rate locks are only good for 30 days, and for a longer lock, it often costs you somewhere, somehow.

I always advise my clients to go with a mortgage bank instead of a large commercial bank. Local mortgage banks such as U.S. Mortgage Corporation and Continental Home Loans are great -- in general, they are faster than commercial banks, have better customer service, more knowledgeable personnel. I think larger banks don't put much resources toward their mortgage business anymore. Of course, I think a lot depends on the particular people you are working with at any lender.

Hope this helps! Good luck. If I can help you with your search, please feel free to contact me.

Sorry to hijack the post...


But I'm curious if we purchased our home in June of 2011 with an FHA and pmi, do the new rules apply to us? Or are we able to get rid of pmi eventually? Tia!!

Re: Sorry more mortgage questions... Help!!!

Sorry to hijack the post...


But I'm curious if we purchased our home in June of 2011 with an FHA and pmi, do the new rules apply to us? Or are we able to get rid of pmi eventually? Tia!!



It's my understanding the new PMI rule is for new customers only (ppl who close after end of June 2013). It wouldn't affect any exisiting homeowners.

Re: Sorry more mortgage questions... Help!!!

Re: Sorry more mortgage questions... Help!!!