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May 29, 2009
Is this mortgage possible?
Hi,
I have a meeting this Monday with a mortgage broker but I would like to understand something... :
I want a 4-3 family at a maximum price of 1m. So let's say I do find a 3 family for 1m, and I can put between 10-15% down. Then what kind of mortgage can I get? And at what rate?
FHA is weird- I went to the gov website and it states that the max loan amount for a 3 family in Brooklyn is 1.2 but that just doesn't add up. Is this true?
Thanks..
Comments
FHA 2 family - max amount they'll loan in 5 boroughs is 934k, max amount on 3 family is ~1.12M... and FHA will allow approx. Max 95% Loan to value (LTV) ratio on their multi-family loans.
So for example - if you found a 1M 3 family you wanted. FHA would loan you the lesser of ~1.12M, or 95% of 1M. So they will loan you 950k and you will have to put down the difference. If house were 1.5M 3 Fam, then they would loan you the 1.12M (b/c 95% of 1.5M is 1.425M) and you pay difference.
The thing that sucks about FHA is they charge a form of Private Mortgage Insurance (PMI) on all their loans and then they also charge regular PMI on LTV ratio over 78%. Which on a 1M dollars is something like an extra $400/mth on top of the regular Principal and Interest.
Also note that these Multi-family rates/limits apply only to owner-occupied properties.
If you could put down more than you would save yourself a hell of a lot of... especially because PMI isn't deductible for taxes, (or actually phases out at really low levels of income).
Good luck.
Posted by: goodoleboy at May 30, 2009 1:18 PM
Great info goodoleboy!
I have received a quote from Bank of A. and they claim that in order to get FHA. I will HAVE to put 15% down.....
The rate they give is 5.5... and the estimated closing costs- 37k. does all this numbers seem right?
Posted by: Williams at May 30, 2009 1:39 PM
Do you have a good mortgage broker? I just purchased a house in Brooklyn with an FHA loan. There is a guy at Manhattan Mortgage named Scott Rapheal who was amazing and talked me through the whole process. Give him a call--he'll figure out everything FHA related!
Posted by: davidchri at May 31, 2009 8:29 PM
A key component people tend to forget with 3-4 family home financing through FHA is that the house has to be self sufficient. What I mean by that is 85% of the monthly rental income on all 3 units or 4 units(even if youre living in one) has to cover your total montly mortgage, taxes, and insurance. sunny.hong@bankofamerica.com
Posted by: shong1 at June 4, 2009 1:19 AM
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