All Forum Posts by: Nick Anderson

@Account Closed

I think most banks should give you an option for an FHA 3.5% down if you will be owner occupying, regardless of if you have a different loan already. This is assuming your property that you're trying to buy is <$625K and you have a minimum credit score of 500 something. Did you get pre approved for a conventional loan? 15% is the minimum down needed for a two unit residential property. The FHA loan allows for 3.5% down.

@Dan Hunter I very much appreciate the insight and time you took to reply.

The reason I'd want to refinance out of the FHA to a conventional after 2 or so years it's my understanding that PMI on an FHA loan is there for the life of the loan, regardless of equity.

As for the refi on my current residence - I just need to have 12 payments, so you are right on the 1 year deal. I can however, pay these in one lump some that would go entirely towards principal.

I think you're right on with the idea that there are so many variables to address in this specific situation. I'll have to do that work on my own, but I am happy to learn from others that may have already gone through a similar scenario.

@Bruce C. Yes the SFH Refi would get rid of a $156 PMI. BUT, I'm currently locked in at 2.99% so if the refi. rate is much higher, I'd have to run some numbers to determine what rate would make it no longer worth it.

I agree that the FHA 3.5% would be the better option now. But on a 500k property, the upfront PMI would be $8500 and the monthly PMI would be $350 which just massively cuts into any cash flow opportunity for a few years at least..

@wes eaves That's a good thought. I have considered that, I will reintroduce that idea to my banker.

Good morning BP community.

My fiancé and I are going to be purchasing a duplex owner-occupied property in Austin, TX this Fall. A few questions I am looking for some advice on from this community.

1. 1.) Currently considering an FHA 3.5% loan versus using a HELOC on our current property towards a 15% down conventional. Our price range is 450K-550K. The 1.75% upfront PMI and .85% annual PMI with the FHA is not at all appealing to me. I think a refinance to a conventional loan in 2-3 years after purchase date would need to happen. Does anyone have experience with this? What are your opinions on my thought process here? Iron sharpens Iron!

1. 2.) We are planning to rent out our 78749 SFH after we move into the duplex. I'm confident we have 20% equity in it after some reno and appreciation this year. Would it be best to refinance prior to moving out so that my lender still sees this as our primary residence? My lender told me that if I refi while we have renters in, the home would be seen as an investment property and interest rate would automatically go up .5%. Would this happen anyway if we moved to a new unit, regardless of when we refinance?

1. 3.) My lender mentioned that underwriting will question why we are moving to a smaller place, and it needs to be justified. Is "getting married" an acceptable justification? What are other justifications?

1. 4.) I feel confident with our realtor and we are going into it knowing that this process could very likely take 3-6 months to find the right deal on the MLS. Being said, should I be looking into other avenues to find deals off-market? It's clear that it's an uber competitive market and we don't have too many resources to build a deal filter at this point. Any advice here is welcomed.

Thanks in advance for any insight! First post on BP forum though I have been reading for years.

Nick