When buying a home in PA, there are closing costs. These are in addition to your down payment and range between 5 and 6% of the sale price of the home. Mortgage company charges, title company charges, transfer tax of 2% in Philadelphia County and prepaid items such as a years worth of taxes, homeowners insurance and interest are all factored into that 5-6%. These items are allowed to be paid by an "Interested Party" to the transaction such as the seller or lendert. However, that would need to be negotiated in your offer to the seller. See more detail on this here:
The 3.5% down payment is the minimum required by FHA. This is the amount of money you put down on a property. Add that 3.5% + the 6% in closing costs and the total to buy a home in Philadelphia without a seller assist or lender credit would be 9.5%.
In addtion, there are programs that can help you with assistance such as PHFA, or Pennsylvania Housing Finance Agency. They offer up to 2% of the sale price towards closing costs as a loan and can eliminate the monthly mortgage insurance premium saving you a great deal of money monthly. Contact your lender to see if they offer this first time homebuyer program. They may also have access to grant money for first-time homebuyers. A good lender will explain all of this too you in conjunction with your real estate agent. Between the two of them, they will guide you to the best path for your situation. There is no cost to use a real estate agent when buying so why not contact them? They will be able to get you through the buying process smoothly which will greatly benefit you! Good luck!
Like any other major decision in your real estate commitment.... you should get a second opinion from a EXPERIENCED Lender.
You should also have a confidential talk with you existing lender.
If you are not comfortable with your lender? Feel free to give me a call for a confidential talk?..... providing you have not already entered into a business relationship with an agent?
All the best John Curci RE/MAX Properties 215-757-2889
So my question is. Why did you not ask for sellers help? Or you did and they could not help.
Have your loan company issue you a good faith faith estimate . This is a list of all the costs involved with your loan and will show you where your money is going.
You should have a good faith estamite from your agent too. The good faith is stronger but your agent should be able to give you a good run down of your fees.
Remember this is one of the biggest invesments you will ever buy. Do not be afraid to ask questions. And if you do not understand the answer then ask again untill you do.Sometimes we agents forget that some buyers have never heard or experanced all the details involved with buying.
Best of luck!
The lender credit is normal. That could explain your 8800 total out of pocket expenses. My estimator is currently showing 9,000 to 10600 for down payment closing costs, and prepaids with the lender credit 1,000 to 2,000 these days the 8,800 sounds ok, but if you have not comparied this with another lender you should. If you want a PA lender who will tell you straight and can do any loan in PA contact Jon Tebay at ENG Lending 412-352-2107. He takes calls on weekends. He has done my clients FHA and VA loans. In fact he did mine in 2011. Best of luck.