FHA Mortgage in Bothell, Mill Creek, Lynnwood, Edmonds, Seattle vs.Conventional Mortgage

fha-updateWhen you are looking into your first home to purchase in the Bothell, Mill Creek, Lynnwood, Edmonds, or Seattle area and you are starting the loan pre-approval process, there are a few different loan programs to choose from.

1. FHA financing – which always has the up front mortgage insurance and monthly mortgage insurance built into your payment. The monthly mortgage insurance premium is 1.15% if financing over 95% or 1.10% if less than 95% with a 30 year mortgage and 15 year over 90% is .50% and from 89.99% to 78.01% it is .25% per month.

2. Conventional with mortgage insurance or no mortgage insurance per month, there are different ways to make this happen, there is always a premium to be paid, you can pay it all at one time, the seller can pay it through the closing costs, but be careful as conventional financing allows only so much in closing costs over 90% financing, make sure you are working with an experienced loan officer on these programs.

Another way to structure this is to have your monthly mortgage insurance premium be a little higher per month, reason for this is there is no premium paid in advance, but it does increase your monthly payment.

With conventional financing there are more considerations of what is called credit risk pricing to take into account, the higher your credit scores the better your mortgage rates can be, due to the risk layering set in place by FNMA and Freddie Mac guidelines.

To know which one is best for you, it is important to know your FICO scores, your total debt to income per month, also known as credit liabilities, your reserves i.e. savings, retirement funds, stocks, etc., and the loan to value, which will be your down payment.

When seeking pre-approval around the Seattle, Edmonds, Bothell or Mill Creek area your loan officer will ask for your financial paperwork over the last 2 years and will need to pull your credit, to give you the best way to structure your loan program and options.

Here is a good informational website: www.davidhaleymortgage.com

Seeking Good Loan Officer in Seattle connect with David Haley

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