FHA vs Conventional
We found a house at $328K in as-is-condition. The house requires about $30K investment with all labor free(my husband's). The appraisal came in very tight at $328K (I do not get how they figured this out). Since we are financing with less than 20% down, there needs to be insurance on the house. our lender called today saying that he could not find mortgage insurance on this house because none of the insurers liked the property - sigarette smell, old house, requires work. I.e. our only choice now is FHA, and not because of us (our credit scores are excellent and debt/equity ratio is ok), but because of the house. I have few questions on FHA
1 - FHA will requrie some insurance premium to be added to the mortgage (about $6-7K) - can I ask for reduction of the sales price now since it is pretty much like the appraisal came low?
2 - Can I refinance FHA into conventional?
3 - Will FHA PMI ever disappear?
we are torn now - want this house, but do not want to increase our debt and have higher than expected monthly payments.