Is the FHA 1% down program right for you?

Good afternoon.  Have you been getting flyers and information on a 1% down FHA loan by another lender?  As we have all come to learn, there is no such thing as FREE.  Someone has to pay and in this case, it is the BUYER!

The Current Rate on and FHA loan is 4.25% with an APR of 5.63%.

The flyer today is quoting 5.75  with APR of 6.7%  The way this loan works, is if the buyer takes the full 2.5% gift, the rate is increased by 1.50%

On $100,000 loan amount, that is  $89.31 a month higher payment to your BUYER!  It is a $32,151 cost increase to the BUYER in interest.

On $200,000 loan amount, that is $178.62 a month higher payment to your BUYER!  It is a $64,302 cost increase to the BUYER in interest.

What would be better??????????

If the buyer has 1%, they may get a gift from a family member that would save them thousands over the life of the loan!!  They can even have ALL of the 3.5% gifted!!  They get the best rate with the lower monthly payment!  One of the most important items to a BUYER, is their payment.

This may be a good loan to use for some, but you have to ask yourself, is it the best program for you?

Just some information to chew on!

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