Financing in Milwaukee>Question Details

Andy, Home Buyer in Milwaukee, WI

First time home-buyer 203K questions

Asked by Andy, Milwaukee, WI Sun Jan 17, 2010

I am currently in the process of purchasing my first home. I have found a foreclosure listed at 39999. The loan estimate (not GFE) shows closing costs at 4K including 20K in rehab funds. To me that seems very high such a small loan. A few of the questions I have:

1.) Is there a 1% cap on origination fee? Is there a 1.5% added fee for the rehab loan.?
2.) Can UFMIP be financed?
3.) Typical length of time these loans take to process

This seems like a great loan for me, and quite frankly one of my few options for getting into my first home. I just want to make sure the bank (who also owns the property) isn't screwing me over too much. Any and all help is appreciated!!

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Gene Turner’s answer
Hi Andy I am working on a streamline 203k right now. There are additional fees involved and every deal is different. I suggest getting more claification from the person that provided the loan estimate or myself and make sure what is actually included with the costs. the UFMIP can be financed as in most cases with FHA . Looks like you would be financing around 60k including rehab costs. Be glad to help you look at the information.
0 votes Thank Flag Link Thu Feb 25, 2010
As with any other loan product, the fees (and rate) are negotiable. Basically, the lower the fees, the higher the rate. And the higher the fees, the lower the rate. In your case, it's difficult to determine whether or not $4000 in fees is too much without having a breakdown in those fees. For example, that $4000 might also include the Upfront Mortgage Insurance Premium (UFMIP) and escrows for property taxes and insurance.

FHA 203(k) loans have extra costs not normally found in other loan products. Typically, the underwriting fee is higher, and there may be an inspection fee to inspect the repairs before the funds are released to the contractor.

As for any FHA loan, the 1% origination fee cap has been removed.

As for the UFMIP, yes it can be finance.

As for the typical lenght of time to process these loans, for FHA 203(k) Streamline Rehab loans, expect 30 - 45 days. For the more involved FHA 203(k) Rehab loans, expect 45 - 60 days.
0 votes Thank Flag Link Mon Jan 18, 2010
It is best to discuss these with a loan officer that specialize in these type loans. These are FHA loans and the rehab can be used for anything that is not structural issue; such as a basement problem or moving walls.

So it is a government loan serviced by the bank and insured by fha (hud) a government program.

I am not sure the current terms and how the origination fees are charged. But the mip should be paid monthly and the term I assume is 30 years.

If you wish to have some additional information send me e-mail and I will research or direct you to the appropriate indiviual that handles these loans.

Keith Manson
First Weber Group
Certifed Distressed Property Expert
Metro Milwaukee
0 votes Thank Flag Link Sun Jan 17, 2010
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