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photolight · Joined: 25 Jul 2010 Posts: 2 1.56 Dollars($)

I have a credit score of 802 but last years income was lower than normal. I don't qualify for a traditional mortgage for the house that I want I'm about 40k short but my father is willing to cosign. I was told I can only get an FHA loan because he is a 'non occupant' and we are still required to pay pmi even though we are putting down 20%...Any way around this??

jveenstra · Posted: Mon Jul 26, 2010 9:45 am Post subject: Coborrower

If your father is wiling to be a coborrower, you could be able to do a Freddie Mac (FHLMC) mortgage as well as an FHA mortgage.

Your father's credit score is important also. If his score is less than yours, his lower score becomes the guiding factor.

tfaulhaber1 · Posted: Tue Jul 27, 2010 8:27 am Post subject:

John is correct. Take a look at a Freddie Mac mortgage as well. In their guidelines I believe they still allow a non occupying co-borrower.

Posted: Thu Jul 29, 2010 4:46 am Post subject:

Thanks for the info. So you are saying I would not be charge pmi if my father is cosigning as a non occupant with a Freddie Mac mortgage?
The Fha loan I was approved for with him as a non occupant co-signer would cost me about $135 a month additional for pmi. We may even put down more than 20% to lower the mortgage (by the time I find the right house) The house I'm looking at now also requires Flood insurance on a flood plane so it is too much to have all those fees.

photolight · Joined: 25 Jul 2010 Posts: 2 1.56 Dollars($)

Thanks for the info. Not sure where my lst post went.
So are you saying that a Freddie mac loan would not charge pmi with a non occupant cosigner ?
FHA wants to charge me about $130 a month additionally.
The house I'm looking at currently is also on a Flood zone (in Massachusetts) so with all those extra fees it would just be too much unless I can bypass pmi.

Also if you do end up paying pmi how long before you could request to be taken off of it?

jveenstra · Posted: Thu Jul 29, 2010 6:02 am Post subject: PMI

Correct, with 20% or more down payment, no PMI with Dad as coborrower with a Freddie Mac loan.

If you do FHA with PMI, you may not request to get rid of the PMI. It is not like conventional loans where with house appreciation over time you could request to get rid of the PMI due to increased home value. FHA does not allow that. So, you would have PMI (with FHA called Mortgage Insurance Premium (MIP), with FHA until it went away by itself, probably about ten years if you had a 3.5% down payment, faster if you had a larger down payment. You are putting 20% down, so, since you may not get rid of FHA MIP faster than five years, you would have the MIP payment 5 years.

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PMI with 20% down??