We went with FHA because of the downpayment. WE paid off debt, but the interest rates were great and even with PMI, the mortgage payment was less than renting a home for us. We bought well within our income ranges, though. Actually, only used one of our incomes. We went iwth a home we wanted to be in, unless something totally unforeseen, until we retire at least. Only work it needed was to finish the basement, and DH wanted to buy a home where he could finish the basement rather than someone else's work. There are a couple things we want to do, but n othing that needs to be done.
FHA for us was the best route. got a low fixed 30 year mortgage that we pay extra on ( but that's voluntary) the payments for PMI aren't bad, and a higher interest rate second loan would have been worse in the end for us than the pmi. We saved a lot this year over last year from the tax write off also (that we didn't get when renting)
If we had the downpayment we would of done conventional (but not a gap one like the 80/15/5 ones) but we figured it was better for us to pay off debts, and have an FHA loan. So we did.
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