| |
Benefits |
FHA Buster |
FHA |
| |
Down payment |
Zero. |
3% down payment. |
| |
Closing costs. |
Zero out of pocket, (paid by the seller). |
Normally charges discount points plus 1% of loan amount
for origination fee (some can be financed). Escrow Fee,
Appraisal Fee, Credit Report Fee, Recording Fees and ALTA
Lenders Title Policy are out of pocket. |
| |
Mortgage insurance |
None. |
1.5% of the loan (can be financed) plus 1/2% of loan
amount each year. |
| |
Impounds |
None required, (optional). |
2 months insurance, 3 to 6 months property
tax, 2 months mortgage insurance. |
| |
Debt Ratios |
Max. 50% housing, 50% total |
Max. 29% housing, 41% total. |
| |
Credit |
Open collections and charge offs okay.
Consumer credit late payments ignored. |
All open derogatory trades must be paid in
full. Maximum 2 times 30 days late on consumer credit. |
| |
Credit Score |
575 minimum |
Not set, approximate 575 minimum. |
| |
Bankruptcy |
1 day after Chapter 7 dismissal, derogatory
trades after Bankruptcy okay. |
2 years after bankruptcy and no late trades
after dismissal. |
| |
Maximum Loan |
Varies from $400,000 to $750,000. |
Varies from$160,000 to $290,000. |
| |
NET REQUIRED |
Less income, worse credit and almost no cash required. |
More income, cleaner credit and more cash
required. Buyer required to use his own funds for down payment, closing
costs, and tax and insurance
impounds and ongoing mortgage insurance payments. |
