Forgotten Your Password?

Need to Register?

Question Icon

Question on how to avoid the high costs of FHA MIP

I was recently preapproved for an FHA loan (has to be an FHA loan as I had a BK 2 years ago) to begin looking to buy a multifamily, but when I run the numbers (I'll be buying in the 400k-450k range) I will be paying anywheres from $300-500 a month in MIP which is outrageous. I was talking with my dad and he said if there was a way that he would like to help and would consider taking out a mortgage in his name if that would save me the $300-$500 a month in MIP. My dad is retired (has great credit and a 60k a year pension). I have a 690 mid credit score, make 85K/yr but have the BK (that was 2 yrs discharged in June). Can I have my dad take out a mortgage with me as a cosignor (for income qualifying) and get a owner-occupied (I would be living there) multifamily loan (with low down-payment)? by krice_170_759 from Boston, Massachusetts. Aug 22nd 2013 Reply


Richard Shapiro (RShapiro)
#12 ranked lender in Massachusetts - 71 contributions

There is no way around FHA Mortgage Ins. Your dad co-signing will not help and being 2 years out of a BK will not guarantee automatic approval.If your dad was to purchase the home under his name, he would need to qualify and put at least 25% down.

Aug 22nd 2013
2
0
Barb Lanis (BarbLanis)
#69 ranked lender in Illinois - 679 contributions

You're stuck in the middle with the BK since it is just 2 years. FHA has the shortest wait period after a BK (assuming Chpt 7). There's no way to avoid the monthly MIP on an FHA loan - it's mandatory. It's a pricey loan now, but you can consider refinancing out of it at a later date when you have reached the 4 year mark after the BK.

Aug 22nd 2013
2
0
Ernesto Marez (Ernesto)
#68 ranked lender in Maryland - 137 contributions

did you file a BK7,11 or 13?Bankruptcy (Chapter 7 or Chapter 11)A four-year waiting period is required, measured from the discharge or dismissal date of the bankruptcy action.Exceptions for Extenuating CircumstancesA two-year waiting period is permitted if extenuating circumstances can be documented, and ismeasured from the discharge or dismissal date of the bankruptcy action.Bankruptcy (Chapter 13)A distinction is made between Chapter 13 bankruptcies that were discharged and those thatwere dismissed. The waiting period required for Chapter 13 bankruptcy actions is measured asfollows:o two years from the discharge date, oro four years from the dismissal date.The shorter waiting period based on the discharge date recognizes that borrowers have already met a portion of the waiting period within the time needed for the successful completion of a Chapter 13 plan and subsequent discharge.A borrower who was unable to complete the Chapter 13 plan and received a dismissal will beheld to a four-year waiting period.Exceptions for Extenuating CircumstancesA two-year waiting period is permitted after a Chapter 13 dismissal, if extenuating circumstances can be documented. There are no exceptions permitted to the two-year waiting period after a Chapter 13 dischargeemarez@thefederalsavingsbank.com

Aug 22nd 2013
1
0
Jericho Cherry (Jerichocherry)
#54 ranked lender in Virginia - 1,107 contributions

There is no way to avoid FHA MIP if you are doing a FHA loan. Adding your dad as a co-borrower will not eliminate the MIP.

Aug 22nd 2013
1
0
William J Acres (William_Acres)
#74 ranked lender in Arizona - 8,728 contributions

unfortunately, cosigners are used for borrowers with little or no credit, or insufficient income. So for you, it's not going to help.. There are lower MIP options available to you if you go 15 years and put 10% down.. But with a BK 2 years ago, you should feel fortunate to even get financing.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Aug 22nd 2013
1
0
Andrew Alfonso (CashCow)
#43 ranked lender in Florida - 271 contributions

FHA has the shortest wait period after a BK (assuming Chpt 7). There's no way to avoid the monthly MIP on an FHA loan - it's mandatory. It's a pricey loan now, but you can consider refinancing out of it at a later date when you have reached the 4 year mark after the BK.

Aug 22nd 2013
0
0
Subscribe to our news feed.