All Forum Posts by: Sebastien Beauboeuf

@Ron Patton that's what's in the back of my mind. Thanks

@Paul Welden I also agree. Thanks!

@Perry Farella got it. Thank you so much for taking the time and helping me (and hopefully others).

@Kirk R. Thanks!

@Perry Farella thanks for your answer. The property is a legal 3 with a bonus attic and we'll be house hacking. I know about renovation loans but we don't want to take on the additional debt. We've been saving for a while and have the money available for that (plus reserves). The reason we also want to put 10% down is to have more skin in the game and reduce our risk and monthly payments. And given that we're doing a cash out refinance 2 years later, we'll put a lot of that money out.

There's one thing you said that i'm a little confused about. The FHA mortgage premium get added to the original loan. Say the loan was 100k so now its 110k. When we refinance aren't we refinancing based on the 110k loan (minus the monthly payments already made)? So we'd still be paying that 10k over the 30 year term right?

@Harjeet Bhatti thank you so much. Yes I want to make renovations but a year later.

@Ari Bauer thank you for your help. I was thinking the same thing. I also believe cash reserves are super important and that might have more weight in my decision.

@Kyle J. Cooper thank you so much for your thoughtful answer. So yes it is our first investment property and we're house hacking (3 flat, plus finished attic). Given that we're not planning on staying on either the FHA or the HomePossible loans for ever (because we are refinancing out of either in 2 years), I'm not worried too much about the monthly payments. But that upfront 10k premium on the FHA, I wont ever get that back. On the other side paying that 9k on the car is taking money out of our pockets right now we could use for renovations and reserves. So it's a tough call.

My gf and I are in a situation where we have the option to choose between FHA or HomePossible. In either cases we would be putting 10% down and planning on refinancing out of mortgage insurance in about 2 years, after making renovations.

The reason home possible is not the obvious solution is because we don’t quite qualify. To qualify we would have to reduce the debt remaining on one of our cars by 9k immediately.

For FHA, our out of pocket cost (including down payment, lender credit, closing costs) would be about $66.3k at 3.25% interest.

For homepossible, our out of pocket cost (including down payment, lender credit, closing costs and lump car payment) would be about $77.5 at 3.125% interest.

The FHA doesn't look so bad but because of the upfront 10k mortgage premium, we calculated that home possible would save us about $13.5k over those 2 years (calculations include monthly mortgage insurance payments and the 10k MIP). I also know that the 10k gets wrapped into the loan so we'd be paying it over 30y but it is an additional cost that we never get back.

I guess I'm trying to figure out if we should go FHA and spend less now but more overtime? Or go HomePossible and spend more now but less overtime? Thank you so much for taking the time to read this and offering some advice. I appreciate it.

My gf and I are in a situation where we have the option to choose between FHA or HomePossible. In either cases we would be putting 10% down and planning on refinancing out of mortgage insurance in about 2 years, after making renovations.

The reason home possible is not the obvious solution is because we don’t quite qualify. To qualify we would have to reduce the debt remaining on one of our cars by 9k immediately.

For FHA, our out of pocket cost (including down payment, lender credit, closing costs) would be about $66.3k at 3.25% interest.

For homepossible, our out of pocket cost (including down payment, lender credit, closing costs and lump car payment) would be about $77.5 at 3.125% interest.

The FHA doesn't look so bad but because of the upfront 10k mortgage premium, we calculated that home possible would save us about $13.5k over those 2 years (calculations include monthly mortgage insurance payments and the 10k MIP). I also know that the 10k gets wrapped into the loan so we'd be paying it over 30y but it is an additional cost that we never get back.

I guess I'm trying to figure out if we should go FHA and spend less now but more overtime? Or go HomePossible and spend more now but less overtime? Thank you so much for taking the time to read this and offering some advice. I appreciate it.