Home Buying in 19111>Question Details

Colleendghrty, Home Buyer in York, PA

I was preapproved for a fha mortage loan at 3.5% and im a first time home buyer, so why on a 80,000 $ home i have 2 put down 8,800

Asked by Colleendghrty, York, PA Fri Jan 25, 2013

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9
Colleen,

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:

http://www.michaelsrealestateblog.com/blog/give-me-seller-as…

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!


Michael Torres
RE/MAX Reliance
215-275-2009
michael@movinginmontco.com
0 votes Thank Flag Link Sat Jan 26, 2013
Could that $8800 possibly include the Closing Costs?
If you take the figures to your Title Company, and they do a HUD1 for you; what will it say?
0 votes Thank Flag Link Fri Jan 25, 2013
Good evening Colleen,

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
0 votes Thank Flag Link Fri Jan 25, 2013
If your going FHA Your asked to have 3 1/2 of your own funds in the deal. On 80,000 that would be $2800. Then you would have closing costs. They consit of taxes to escrow, home owner insurance to escrow and the stuff you mentioned. A good rule of thumb is closing cost run about 5% of the cost of the home. And you should be putting a deposit down to hold the property. (1000)
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!
0 votes Thank Flag Link Fri Jan 25, 2013
Collen
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.
0 votes Thank Flag Link Fri Jan 25, 2013
3.5% of 88000 is 3080 if you get a 6% sellers assist that should cover most closing costs.I currently have a lender who is giving buyers up to a 2 % lender credit at closing

Michael Solomon
Realty Mark
215 421 2121
0 votes Thank Flag Link Fri Jan 25, 2013
Also this mort company has no 1%points system is tht good
0 votes Thank Flag Link Fri Jan 25, 2013
Thnks. But thy r telling me tht 6,000 is on fees lik flood chk, mort ins, notary, recoder, title ins,credit report,apt fee,appraisel fee, phila 1% state n federal tax... Is this correct??? Im fha not conventional so my mortage tax is higher... Is this correct or uncommon?
0 votes Thank Flag Link Fri Jan 25, 2013
I believe you are confusing down payment with other fees. Get a breakdown of Closing costs, Prepaids, and downpayment. With these your answer will become evident without them any answer is a wild guess.
0 votes Thank Flag Link Fri Jan 25, 2013
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