Interesting. So you yourself hired them, or they were part of the brokers services? I think that's the subtlety I'm looking for here. I have no doubt lawyers are involved behind the scenes, but not explicitly hired by the buyers or sellers.

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!

Test for a properly working heater and, if present, air conditioner
Test for a working oven hood/fan (carbon monoxide danger)

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.

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.

And that's fine for you, as a seller, but doesn't contribute to the questions the OP has as a buyer.

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.

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!

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.

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.

Why would I want to go for FHA over a regular mortgage?

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.

after speaking to a few mortgage professionals I am a little confused on the closing costs with no straight answer. All of them are saying that most of the closing costs are regulated - title insurance, taxes, etc... and the only thing that they have control over is origination fee and application fee (or something along those lines). If that's true, all of their closing costs would be in the same exact price range, give or take a few bucks, so what would I be shopping around for if the rates are the same?

The way I see it the out of pocket expenses boil down to this:
- down payment
- closing costs (including all pre-paids)
- lawyer
- inspection

Am I missing something?

Not sure how you find them. I joined my parents credit union as a kid and they happened to be a portfolio lender. I've been with them for decades now. Another advantage is portfolio lenders don't make their money off the closing costs so they are typically less. They make it off servicing the loan.

»www.investopedia.com/terms/p/por···IKsv79nd

One other thing to think about is what type of lender do you want? I prefer a portfolio lender. The downside is because they fund and service their own loans their requirements are far higher then other banks. The upside is they service their own loans so you don't have to deal with Wells Fargo this year Chase next year and Stearns the year after that. Another upside is most portfolio lenders offer better services on mortgages like mine allows me to drop my rate anytime I want for .5% of the outstanding principle balance on the loan. They allow me to skip paying principle in December each year if I want as well. It's a way people can save a few hundred for the holiday's. You wouldn't get those types of services normally.

I've narrowed down the area where I would like to buy a house, now I just have to get pre-approval for mortgage in order to know for a fact what I can get as far as a loan.

I believe the lawyer *requirement* depends on the state. In Maryland and Illinois, I think they are required. In Wisconsin, they are not.

I guess you can see where i have purchased houses...

But as robbin said, you should get a lawyer even if you do not have too.

/alan

Unless you're buying a new property (either custom built or otherwise purchased from the builder) it's extremely rare to need a lawyer when purchasing a house.

Unless you're buying a new property (either custom built or otherwise purchased from the builder) it's extremely rare to need a lawyer when purchasing a house.

But of course, you should always take your realtor's advice for this kind of thing.

No. She did it because it IS approved, underwritten and waiting.