Getting a FHA Mortgage Loan in San Antonio, TX

Transcript

If you’re getting an FHA loan in the San Antonio area, you need to know what entails the pricing that goes behind that loan. Now, what most people won’t tell you is you’re paying insurance. You’re paying insurance upfront. It’s called the U F M I P, upfront Mortgage Insurance Premium. Also paying a monthly mortgage insurance that can be quite expensive.

What that does is it protects the lender to default. So if you default on this loan, even though you’re only putting three and a half percent down, the lender is guaranteed fees to cover their losses. That makes the loan more valuable because it’s more valuable. A lower interest rate is worth the same as a higher interest rate without insurance.

How does that translate to real world terms? Well, when I ran the pricing today, 20% down $500,000 purchase. A FHA loan was 1.25% lower in interest rate at a six 80 FICO score, and that’s a huge margin. I mean, you’re looking at over $500 a month for that loan size, and you think, well, how is that possible?

Well, it’s possible because the lenders have increased their margins. What they do is they move that FHA rate up towards the conventional rate and they make more money in the back end. You don’t see it. On the commission side, you see it in their monthly payment, and you’ll see it in the, in the form of hundreds of thousands of dollars over the life of the loan.

So know what you’re getting, know what’s going behind it, and look at a lender and see if they’re being honest with you. If they’re being fair, if they’re being fair. The FHA rate should be significantly better. Depends on the yield spread curve, and it can change day to day, but typically it’s one point or three quarters of points, sometimes one and a half points better.

And you deserve that by paying that monthly mortgage insurance and the upfront mortgage insurance premium. So know what you’re getting, know how to shop for a good deal and know who’s being fair to you because you don’t see these numbers behind. And I want you to know these things. Look at my other videos.

I talk about the difference in VA rates, the difference in fha, how those insurance should give you a better loan, a lower interest rate, but usually it’s not passed on to the consumer. And would be equivalent to having a larger rebate on a car, but a car dealer absorbing that and not passing it on to you.

So you earned this by paying the monthly more insurance, just like the VA people earned a month, a lower monthly payment by paying with their service, which the VA gives them the insurance for this. These are things that is important as a consumer for you to know. You can call me or look at my other videos to learn more about this and hopefully this is helpful.