I was going over loan options with a home buyer the other day and realized that we spend a lot of time talking about mortgage insurance and when comparing loan programs for people the cost of the PMI really comes into play. When I sat down to make this video I was simply going to go over the basic options and the costs associated with each. The video turned into more of a why not to get a FHA loan, which wasn’t my intent. However, the numbers don’t lie FHA is the most expensive loan out there right now. Its the new “subprime” funny that the government loan program who’s mission statement reads: “HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all . . . “ is the most costly of all the home financing options. Anyways, we close tons of FHA loans and it is often the only option for people wanting to buy now; so enough said. The chart outlines the basic’s reach out to me anytime with questions.
|% Down||3.5% Down||Zero Down||Zero Down|
|Mortgage Insurance Rate Per Year||5%||0.62%||1.35%||0.50%||zero|
|Upfront Mortgage Insurance (Rolled into the loan)||zero as depicted here. Optional. Call for details.||1.75%||2%||2.15%|
|Example: $150,000 loan Monthly/Upfront||5%||$77 per month||$169 per month / $2,625 upfront||$62 per month / $3,000 upfront||$3,225 upfront|
|10%||$55 per month|
|15%||$33 per month|
|Monthly MI Drops Off||All 78% Loan To Value||Never||Never||N/A|
|Mortgage insurance rates vary based on credit core, down payment, occupancy, loan term, etc… This chart gives an example for comparison, but doesn’t guarantee any particular rate or mortgage loan approval. Call (269) 598-3975 for details and a quote specific to your situation.|
Working with home buyers searching for a new primary residence is a totally different game compared to working with investors and rental property. Sure, there are similarities, but what want-to-be home owners care about is different than what an investor cares about. Frankly, for an investor, it’s all about the money and it should be. When someone purchases a rental property they are essentially running a business. If we can help them run a successful business and turn a profit they will likely come back and buy more properties.
There are lots of want-to-be investors out there and the hardest part is getting started. We are going to help unravel the maze. We will also look at long term planning. Often just knowing what needs to happen to acquire the next property and the next one after that is one of the keys to success. Owning rental property can be a great way to build wealth and we are here to help.Visit Jeremy's Blog