All Forum Posts by: Edward Cervantes

For those in their early 20's and in college, FHA is often the best option (unless your state offers programs that requires conventional or other financing—you can always ask a local lender).

In a nutshell, FHA is a government ensured loan that compensates the bank if the owner is foreclosed upon. Why? They want to help the public afford mortgages. To qualify for FHA , you must live in the property for at least one year and so you can use only FHA for rentals only if you live in one of the units. The benefit to FHA loans is they require only put 3.5% down as opposed to 20% down for conventional loans.

If you can save 20% downpayment and go conventional, you will not have to pay mortgage insurance. Anytime you pay less than 20% down, lenders factor mortgage insurance into your loan payments (typically $100/month for every $100,000 you finance).

Uncle Sam also lets you deduct mortgage interest. From what I understand, Uncle Sam will no longer allow you to deduct mortgage insurance as of 2017. 

Say you are buying a $200,000 property, then you may want to save $7,000 plus $3,000 for closing costs.