Lisa, Home Buyer in California

3.5% down payment, is it based on purchase price or purchase price added closing cost?

Asked by Lisa, California Sun Jan 4, 2009

If I am going to ask for $5000.00 credit towards my closing cost and add it to the pruchase price, what is my 3.5% FHA downpayment based on? Purchase price is $250,000. $255,000 with the added closing.

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Lisa: the 3.5% is based upon PURCHASE PRICE and the $5,000 would then be Seller contributed closing costs which they can contribute up to 6% of the purchase price. The requirements for an FHA purchase are actually that you have 3.5% of YOUR OWN MONEY into the transaction. That money can be down payment or closing costs. This money can also be a GIFT from a family member. Everybody thinks it is 3.5% for Down Payment but it actually only 3.5% of YOUR MONEY in the transaction. I hope this helps. You would not want to report the Sales Price as being higher as you will also be assessed property taxes on the purchase price. If you have any further questions please contact me ... I would be happy to help you structure your transaction. I am an FHA approved mortgage broker here in Long Beach. Office: 562-728-9971
Web Reference: http://www.janewhitten.com
0 votes Thank Flag Link Mon Jan 5, 2009
Lisa it is based on the purchase price. If it is $250,000 with 5 back it is 25ok. however if you add 5k to the price and ask for 5k back then it is 255k. hope this helps...
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Sun Jan 4, 2009
Hi there Lisa, You should ask your realtir about this, This is what they are there for.
$ 255,000

Kind Regards
Michael Barron
Realtor/MBA
First Team Real Estate
0 votes Thank Flag Link Sun Jan 4, 2009
If you are adding closing costs then the purchase price is now $255,000
0 votes Thank Flag Link Sun Jan 4, 2009
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