I am looking for some advice here
I am in BK Chapter 13 for over 12 months now so I qualify for FHA 3.5% down loan. Originally I was going the HML route with 20% down and getting killed on 5 points at 7.9% fixed or 7.5 ARM. Or another HML with 20% down, 3 points and 8.99%. If I could refi out within 2 yrs the 2nd HML is better choice otherwise over 4 years the 1st is cheaper.
Now I like to go FHA because points and rates much lower. However I still have the 20% down but my credit union rep (they do not do FHA, I inquired about equity line for repairs) said FHA requires PMI the life of the loan, so I have to refi to get it off. Well I can not get a conventional loan because I am in BK13 till Nov 2018. The mortgage broker my realtor knows got me an auto approval but we still need to summit info (reason for BK13, and the pay history of 12 payments on time required)
Main issue is. Do I have to refi to conventional to get PMI off? If I put 20% down, will I still have PMI? What would the PMI rate be? If still maybe cheaper to do FHA since the combined rates are less than HML. I know as of now I can not get conventional till BK13 is discharged but one HML said there is a class I can take and then I should be able to get into conventional within 1 yr. Its a new government program but he does not have much info on it yet. However I never a disruption in income. MY BK13 is because of a bad business investment back in 2006 and the bank went after wage garnishment now.
Any help be appreciated