Monday, September 6, 2010

FHA Loans vs Fannie Mae loans - compare and contrast We did a comparison of FHA jumbo vs Fannie Mae Jumbo loans in 2008, and also updated that artic

FHA Loans vs Fannie Mae loans - Which one is for you?

We did a comparison of FHA jumbo vs Fannie Mae Jumbo loans in 2008, and also updated that article onFHA Jumbo vs Fannie Mae High Balance recently. It made me think, what about conforming loan sizes - $417K and under, how do FHA and Fannie Mae conforming loans compare? We found that in many instances, FHA has many benefits and more ways to help homeowners refinance and homebuyers purchase homes.

FHA Purchase Loans and FHA Refinance Loans offer many ways to help both homebuyers and refinancers. Here are some comparisons:

  • FHA Loans require a 3.5% downpayment vs a 5% downpayment for Fannie Mae
  • FHA Refinance Loans require a 2.25% minimum equity vs a 5% minimum equity for Fannie Mae Refinances (for non- cash out transactions)
  • FHA Allows Cash out refinances up to 85% Loan to Value - Fannie Mae's limit of 85% loan to value
  • FHA Loans allow you to consolidate a first and second mortgage without classifying the transaction as Cash out - Fannie Mae Loans consider paying off a non-purchase second mortgage to be Cash out, resulting in higher loan related fees, higher fico qualification, and a higher rate.
  • FHA Loans require a 620 mid score vs a 680 for a 95% Fannie Mae Purchase.
  • FHA allows higher debt ratios than Fannie Mae loans, especially when MI is involved

While the FHA loan does have Mortgage Insurance, it does offer options that Fannie Mae does not, and Fannie Mae loans over 80% ltv also require PMI.

Here are some comparisons we made between FHA and conforming loans to measure the coming changes to the FHA Mortgage Insurance costs. Please view the following articles for more information on comparing the old and new FHA MIP premium structures, and how they effect you:

FHA Changes to Mortgage Insurance Premiums authorized in House Bill HR 5981

Part 1: Why FHA Loans will still be the better choice for many homebuyers (and refinancers!)

Part 2: Why FHA Loans will still be the better choice for many homebuyers (and refinancers!)

Call us at 866-900-2342 to see if a FHA Purchase or FHA Refinance is the right solution for you.

VanDyk Mortgage has been making FHA loans since 1987. We are a HUD recognized Full Eagle FHA DE underwriter and FHA Direct Lender. We are also a VA Lender and VA Jumbo Lender.

Go with the Government Loan Pros, go with VanDyk. Call Brian Skaar at 866-900-2342 for help with your FHA or VA loan. We offer FHA, FHA Jumbo, FHA Manual Underwrite, FHA Rehab 203K, VA, VA Jumbo, Conforming & Jumbo Loans. We serve the following areas for VA, FHA and Conventional loans:California,Southern California, Los Angeles, San Diego, San Jose, San Francisco, Santa Monica, Pasadena, Brea, Diamond, Long beach, Huntington beach, Irvine, Costa Mesa, Hollywood, North Hollywood, San Mateo, ventura, Riverside, Oakland, Fremont, Sunnyvale, Santa maria, Oceanside, Vista, Escondido, Los Angeles, Rancho Bernardo, Poway, San Marcos, Carmel, Monterey, Santa Barbara, Santa Cruz, and all areas in between. VanDyk Mortgage offers FHA, VA, & Conventional loans in addition to FHA Jumbo, VA Jumbo, and Conforming Jumbo loans (aka FHA High Balance, VA High Balance, and Conforming High Balance).

VanDyk Mortgage is a VA Direct Lender (since 1987) offering VA Loans such as VA purchase loans, VA Streamline Refinance, VA IRRRL, VA Refinance Loans, VA Mortgages of all types. As a Government Direct Lender, VanDyk Mortgage is also a HUD Full Eagle FHA Direct Endorsement Underwriter, ie FHA Direct Lender offering FHA Loans such as FHA Purchase loans, FHA Refinance, FHA Streamline Refinance, FHA loans, FHA Jumbo, FHA Jumbo Purchase, FHA Jumbo Refinance, FHA Jumbo Streamline Refinance, FHA High Balance, and FHA mortgages of all types.

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