Approved with FHA Home loan but they require payment protection?

Deal Score0

why is this?
we have to have a 6% assist and 3.5 percent down, which is fine but why do we need this on top of the mortgage, taxes, and insurance?!
we are buying our first home from my mother in law for 90k and the home is worth 160k so we are deff making out good but whats up is this a scam?
app by bank of america by the way.

4 Comments
  1. Reply
    Spinich
    April 29, 2011 at 10:26 pm

    First off, B of A sucks.

    Secondly, this is called PMI – Private Mortgage Insurance. It is required for all FHA loans.

  2. Reply
    jlf
    April 29, 2011 at 10:41 pm

    Low down + FHA loan = Mortgage insurance required. Doesn’t matter what you think it’s worth.

  3. Reply
    Alterfemego
    April 29, 2011 at 11:36 pm

    Oh you’re talking Mortgage Insurance (PMI). It’s because you did not put 20% down.

  4. Reply
    Noneya
    April 29, 2011 at 11:48 pm

    First things first. If you are buying from your mother at $ 90,000 and the house is worth $ 160,000 you should be doing this as a gift of equity purchase. This way you will not need the 3.5% down payment.
    As far as the mortgage insurance, this is an FHA requirement no matter how much equity you have. The only time you do not have monthly mortgage insurance on an FHA loan is if you do a 15 year fixed at a loan to value of 89.99% or less. Feel free to contact me through my profile if you need more info or help.

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