I’m a first time home buyer and I’ve just recently heard about a program called CHIP (through BBT). This program BBT will finance 97% to 100%, with no PMI, but with a high interest rate. There’s another loan, called Conventional No Mortgage Insurance Program by the government, it runs the same way.
My credit score is good, where I can get a 3.25% – 3.75% interest rate on a FHA Loan. I can also apply for down payment assistance. What will be the disadvantages between this two programs? I do have a years worth of mortgage set aside as well extra for house repairs and ER, but no enough for a down payment.
I don’t know which program to chose.
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if you go chip at a high rate, youll regret it years later. you wont be the first to do this.
To make an informed decision you really need to compare the actual rates and terms for the two programs. With an FHA loan at 3.75%, when you factor in the 1.75% Up Front Mortgage Insurance Premium that is added to your loan balance and the 1.35% annual mortgage insurance that is paid monthly with your payments, your total payment is comparable to a loan at 5.75% with no PMI. If the “high” rate with the CHIP program is less than 5.75% you may pay less with the higher rate.
Right now, the PMI on FHA loans will be canceled after 11 years. If your FHA case number is generated after June 3 the PMI will be paid the entire life of the loan.
http://portal.hud.gov/hudportalocuments/huddoc?i…
Source(s): Licensed Loan Officer in Ohio
Chip Loan
Source(s): https://shrinke.im/a97Yg
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Source(s): Numerology Life Paths http://renditl.info/NumerologySecrets/?Dpep
I would like to know more about this as well