BobAccount deleted
join:2012-07-22
New Jersey Reviews:
 ·Optimum Online
| reply to Dodge
Re: Mortgages At closing, you'll also have to pay property taxes in advance and up to one month's interest. (Hint: Schedule the closing for near the end of the month.)
Here are the fees I had to pay when I refinanced in 2008:
$275 Appraisal Fee
$15 Credit report
$200 Application fee
$10 Flood cert fee
$200 Bank attorney review
$22 Express mail fee
$100 Doc prep fee
$20 Wire transfer fee
$300 Settlement or closing fee
$25 Notary fee
$736 Title insurance binder
$30 Wire fee
$60 Overnight fee
$50 Down load / copy fee
$335 Recording fees
$5 Recording processing fee
Total is $2383. A new purchase will probably have more costs (lawyer, additional title insurance). |
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DodgePremium
join:2002-11-27 | reply to Archivis
said by Archivis:Closing costs are extremely difficult to predict with great accuracy. It also depends on the type of loan you have. Are you a first time home buyer, or have you bought/owned a home in the last seven years?
If not, you could qualify for FHA, which means you need 3.5% down. Your actual closing costs may be a little higher than that, but that's what seller help is for and it can help bring those costs down to exactly 3.5% of the total home purchase.
Basically, if you can qualify for FHA, you're going to need $3500 for every $100k the home is going to be purchased for.
Why would I want to go for FHA over a regular mortgage? Rates are higher, it has a built in insurance which you can't get rid off. Am I missing an advantage of it? I thought FHA was designed for people with not enough of a downpayment and/or not so great credit scores. |
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 ArchivisYour DaddyPremium
join:2001-11-26
Earth
kudos:18 | Are you lacking the kinds of funds needed for a down payment?
Is 3.25% a high interest rate? |
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TheSMJ
join:2009-08-19
Farmington, MI | reply to Dodge
When I looked at mortgages 2 months ago, the rate for FHA was .25% lower than it was for a standard mortgage. Furthermore, unless you can put down 20% or more at closing, you'll be paying insurance for either type of loan.
After crunching the numbers, FHA was the cheapest option. |
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guppy_fishPremium
join:2003-12-09
Lakeland, FL
kudos:1 Reviews:
 ·Verizon FiOS
| reply to Dodge
said by Dodge:Why would I want to go for FHA over a regular mortgage?
Lower down payment is the only reason. They are the only ones that allow less than 5% and under 20% down you need PMI insurance which is a different thing |
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 DraimanLet me see those devil horns in the sky
join:2012-06-01
Kill Devil Hills, NC
·Verizon FiOS
2 edits | reply to Dodge
I'd always go for a conventional myself but here's the basics on them both.
"FHA Loan Advantages:
Lower down payment requirements
Lower credit score requirements
May be easier to qualify for than a conventional loan
No prepayment penalty
Streamlined FHA refinances are fast and easy
FHA Loan Disadvantages:
Subject to mortgage insurance
Fewer loan options than conventional loans
Not available on all property types
Loan limit of $729,750
Generally only allowed to have one FHA loan
Conventional Loan Advantages:
No mortgage insurance requirement
Can be used on all property types
More loan program options
Can hold numerous conventional loans
No maximum loan limit
Conventional Loan Disadvantages:
Higher down payment requirements
Higher credit score requirements
May be more difficult to qualify than FHA loan
Mortgage insurance still required for loans above 80% LTV
Possible prepayment penalty"
»www.thetruthaboutmortgage.com/fh···al-loan/ |
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DraimanLet me see those devil horns in the sky
join:2012-06-01
Kill Devil Hills, NC Reviews:
·Verizon FiOS
| reply to guppy_fish
said by guppy_fish:said by Dodge:Why would I want to go for FHA over a regular mortgage?
Lower down payment is the only reason. They are the only ones that allow less than 5% and under 20% down you need PMI insurance which is a different thing All loans require PMI under 20% LTV.
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IF YOU FIND ANY MISTAKES IN MY WORK...Please consider that they are there for a purpose. I try to please everyone and there is always someone looking for mistakes! |
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ArchivisYour DaddyPremium
join:2001-11-26
Earth
kudos:18 | That LTV, according to my bank, is 21-22%, not 20.
Conventional requires 5% down. FHA requires 3.5% down. That would be total money committed to the purchase of the home at the end of the day. You may have closing costs that exceed 3.5%, but seller help allows you to tack that onto the mortgage as long as you're still coming up with 3.5% out of pocket.
The only reason why my payment is higher on FHA vs. Conventional is because I'm financing an extra 1.5%. My interest rate was lower via FHA.
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A government big enough to give you everything you want, is strong enough to take everything you have. -MLK |
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DraimanLet me see those devil horns in the sky
join:2012-06-01
Kill Devil Hills, NC Reviews:
·Verizon FiOS
| said by Archivis:That LTV, according to my bank, is 21-22%, not 20.
Conventional requires 5% down. FHA requires 3.5% down. That would be total money committed to the purchase of the home at the end of the day. You may have closing costs that exceed 3.5%, but seller help allows you to tack that onto the mortgage as long as you're still coming up with 3.5% out of pocket.
The only reason why my payment is higher on FHA vs. Conventional is because I'm financing an extra 1.5%. My interest rate was lower via FHA.
They are required to drop MI at 22% LTV by law but can drop it at 20%. It's up to the bank to decide between 20-21.9999%. Another reason why a portfolio lender is king. My portfolio lender drops MI at 20% LTV based on the original appraisal automatically. Most other lenders will drop MI at 20% if you get a NEW appraisal and come in at or below 80% LTV so you pay $300-450 and pray it doesn't come in lower. Even worse yet you can get FHA and have no option to get it removed until 22%. That's thousands of dollars between lenders right there.
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IF YOU FIND ANY MISTAKES IN MY WORK...Please consider that they are there for a purpose. I try to please everyone and there is always someone looking for mistakes! |
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ArchivisYour DaddyPremium
join:2001-11-26
Earth
kudos:18 | Makes sense. My mortgage will get sold around like a ping pong ball anyways. |
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 dennismurphyPut me on hold? I'll put YOU on holdPremium
join:2002-11-19
Parsippany, NJ
·Verizon FiOS
·Optimum Online
| reply to TheSMJ
said by TheSMJ:When I looked at mortgages 2 months ago, the rate for FHA was .25% lower than it was for a standard mortgage. Furthermore, unless you can put down 20% or more at closing, you'll be paying insurance for either type of loan.
After crunching the numbers, FHA was the cheapest option.
I can tell you that, as a seller, I was wary of folks bidding with an FHA mortgage.
In fact, when I sold my house in 2011, I received 3 competing bids - the first one was ~10k less than asking price, the second was $2k over asking, the third was $4k over asking.
I took the second bid. It had a solid 20% cash down with a pre-approved conventional mortgage.
The third bid, even though it was $2k more, was an FHA loan with only 5% down. I didn't want to deal with FHA inspections and repair requirements, etc. That extra $2k wasn't worth the hassle.
I was extremely lucky to have a multi-offer situation in 2011. A week after listing. Kind of unheard of these days, but it enabled us to buy our 'forever' home! |
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 bobrkYou kids get offa my lawnPremium
join:2000-02-02
San Jose, CA
 ·SONIC.NET
| reply to Draiman
said by Draiman:A lawyer is required by law here. I'd hire a lawyer even if it wasn't required. They are the glue that holds the deal together. They make sure you are protected in the transaction. Without one you might get hosed in the P&S with almost no way to back out. A lawyer would catch that and make them change it before you sign it. Without a lawyer you just need to assume everyone is out to get you.....BECAUSE THEY ARE!
My assumption is that these kinds of laws are common back east, but I have never hired a lawyer for a real estate transaction in California and know no one who has. |
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DraimanLet me see those devil horns in the sky
join:2012-06-01
Kill Devil Hills, NC Reviews:
·Verizon FiOS
| said by bobrk:said by Draiman:A lawyer is required by law here. I'd hire a lawyer even if it wasn't required. They are the glue that holds the deal together. They make sure you are protected in the transaction. Without one you might get hosed in the P&S with almost no way to back out. A lawyer would catch that and make them change it before you sign it. Without a lawyer you just need to assume everyone is out to get you.....BECAUSE THEY ARE!
My assumption is that these kinds of laws are common back east, but I have never hired a lawyer for a real estate transaction in California and know no one who has. They are in California should you choose to use one but not required there.
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IF YOU FIND ANY MISTAKES IN MY WORK...Please consider that they are there for a purpose. I try to please everyone and there is always someone looking for mistakes! |
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TheSMJ
join:2009-08-19
Farmington, MI | reply to dennismurphy
How old is your information about FHA mortgages?
I ask because up until 2007-2008, the process for an FHA loan was very different compared to how it is now. Before it was reformed, FHA did require a very in-depth inspection and was a PITA for sellers. Now the inspection is very similar to the one used in conventional mortgages, and the main thing lenders look at is the value of the house vs. the amount of the loan.
As for the size of the down payment, why would you (the seller) care? Once the loan is approved for the buyer, you'll get your money regardless of the buyer's ability to pay the mortgage payments. It's no concern of the seller at all. |
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ArchivisYour DaddyPremium
join:2001-11-26
Earth
kudos:18 | The FHA has light requirements. Unless the home is an absolute shit hole, you shouldn't have any issues.
FHA did not place any demands on the home I bought. I had a home inspection that was done and I asked for some repairs to be done out of that, but not due to FHA.
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A government big enough to give you everything you want, is strong enough to take everything you have. -MLK |
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dennismurphyPut me on hold? I'll put YOU on holdPremium
join:2002-11-19
Parsippany, NJ Reviews:
·Verizon FiOS
·Optimum Online
| reply to TheSMJ
said by TheSMJ:How old is your information about FHA mortgages?
I ask because up until 2007-2008, the process for an FHA loan was very different compared to how it is now. Before it was reformed, FHA did require a very in-depth inspection and was a PITA for sellers. Now the inspection is very similar to the one used in conventional mortgages, and the main thing lenders look at is the value of the house vs. the amount of the loan.
As for the size of the down payment, why would you (the seller) care? Once the loan is approved for the buyer, you'll get your money regardless of the buyer's ability to pay the mortgage payments. It's no concern of the seller at all.
It could be out of date; I'm not in the RE business nor do I track what FHA's requirements are this year. I just know I had heard horror stories of FHA inspections in the past.
I also knew that a small down payment and a pending FHA loan did not make me comfortable. I thought it was more prudent (and the outcome proves that my decision was right) to go with someone willing to put a full 20% in the game. A pre-approval does NOT guarantee approval. While 20% down doesn't guarantee approval either, it gives me a much greater confidence that the buyer is committed and willing to work through any issues. Putting a small amount down means that it's much easier for the buyer to just walk away. The good faith deposits were also significantly different.
I wanted to see my former home end up in good hands and with good owners for all my former neighbors (who are still close friends.) Mission accomplished. Given the back story involved (each of the RE agents wrote an intro letter for their clients), this was the buyer I was most comfortable with.
I'm happy with my decision and stand by it. |
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ArchivisYour DaddyPremium
join:2001-11-26
Earth
kudos:18 | And that's fine for you, as a seller, but doesn't contribute to the questions the OP has as a buyer. |
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dennismurphyPut me on hold? I'll put YOU on holdPremium
join:2002-11-19
Parsippany, NJ Reviews:
·Verizon FiOS
·Optimum Online
| said by Archivis:And that's fine for you, as a seller, but doesn't contribute to the questions the OP has as a buyer.
It does, though. Just trying to provide insight as to what may happen on the other side of the table. |
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DraimanLet me see those devil horns in the sky
join:2012-06-01
Kill Devil Hills, NC Reviews:
·Verizon FiOS
2 edits | reply to Archivis
said by Archivis:The FHA has light requirements. Unless the home is an absolute shit hole, you shouldn't have any issues.
FHA did not place any demands on the home I bought. I had a home inspection that was done and I asked for some repairs to be done out of that, but not due to FHA.
It's an FHA approved appraisal vs. a conventional appraisal. An FHA appraiser looks a lot more stuff when they look at the property. It seems invisible to you if they don't find anything but there are still extra steps taking place.
Some of the extra's on an FHA appraisal:
"EXTRA CHECKS REQUIRED FOR AN FHA APPRAISAL
Identify any chipping, peeling or cracked lead-based paint - interior and exterior
Verify there are no issues with water damage or drainage
Insure proper ingress and egress (18") from all buildings to the lot line.
Test for a properly working heater and, if present, air conditioner
Test for adequate water pressure and no water leaks
Validate every bedroom has exterior access
Test for a working oven hood/fan (carbon monoxide danger)
Verify a minimum 60 amp electric box
Test for working electric outlets in every room
Identify any exposed wiring or missing electric box cover plates
Verify roof vents are screened and a maximum of three layers of roofing material
Complete a head and shoulder inspection of attic and crawl space"
Basically the house has to be in good shape for an FHA loan. If it needs a little TLC like a broken rail or cracked window the seller has to fix that before you can buy the property under FHA guidelines. The seller might increase the sale price to account for this. In a conventional loan you might point out problems but get a closing credit and fix the stuff yourself. That's not possible with a FHA loan.
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IF YOU FIND ANY MISTAKES IN MY WORK...Please consider that they are there for a purpose. I try to please everyone and there is always someone looking for mistakes! |
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 brianPremium
join:2002-05-02
Lake Forest, CA | reply to bobrk
said by bobrk:My assumption is that these kinds of laws are common back east, but I have never hired a lawyer for a real estate transaction in California and know no one who has.
And now you do. We completed a short sale last month and we listed the property with a brokerage that is backed by two lawyers (one is a family friend) that review all documents for the transaction. Granted, neither we, the buyer or the bank paid anything, beyond the 6% commission, for this. We were a bit wary of using a friend for the transaction, but it was nice to have the assurance that someone was checking to make sure the bank wasn't going to screw us.
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flickr gallery | photo blog (rarely updated) | play mafia! |
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