September 12th, 2011 10:40 PM by Preston Ware
Comparing Fannie Mae Homepath and FHA 203K Mortgages.
Both of these options offer help buying the fixer upper or the just need a little fixer upper. The FHA option is much more versatile. It can be used for a Refinance or a Purchase and provides a budget for up to $35,000 in fix ups. It is more versatile because more types of properties qualify for this loan. The Fannie Mae Home Path is sort of an exclusive list that is currently owned by Fannie Mae. Click here: to visit the list of Fannie Mae Homes in Your Area.
The Fannie Mae Homepath loan is available on a list of Fannie Mae owned properties. The best part about this option is there is no appraisal and much of your closing costs can be structured into the contract with the seller: (Fannie Mae) Homepath properties are your foreclosures which typically are a little lower in price but may have been neglected within the last 24 months.
A great benefit of Homepath is that there is no mortgage insurance in your payment. It is very similar to lender paid mortgage insurance in that the rate provided is higher but the mortgage insurance is factored into the rate. Instead of getting 4.25% for example with FHA 203K (with mortgage insurance) you may get 5.5% with HomePath but no PMI. (These numbers are given just for the sake of an example) Another thing to think about is when you receive your interest deduction for your mortgage from the IRS, this figure is derived from your mortgage payment and has nothing to do with what kind of PMI you have on your loan.
For more information on these two programs. Please visit the link that I have prepared for each one