What are the costs to consider?

Question

Adam Petterson · Answer

@Ty Monroe

Ty if you are going to go FHA there will be multiple fees involved. My strategy has been to try and negotiate and have the seller pay part of my closing costs as well. I would rather have a couple thousand dollar higher mortgage (amortized over 30 years) vs having to bring more money to closing. Here are some of the costs to consider:

Down payment: You will need at least 3.5% down for an FHA loan

Title work: The lender will require title work and a lenders policy to insure them against any title issues. This fee will depend on the property price, title company, location, etc

Lender Fees: Your lender will charge an origination fee, credit report fee, etc. Usually the origination is between .5-1.5% of your mortgage

Pre pays: You may have to pay insurance and taxes for x amount of months up front as well

misc fees: Deed tax, mortgage registration, etc. This will vary upon mortgage size

If you plan on house hacking, FHA financing is a great option as you have low down payment requirements, and they are able to count 75% of the rental income off of the other unit/units for qualifying purposes.

If I were you I would look into the FHA Sapphire program. There is an opportunity to receive a grant for up to 5% to assist with down payment. You never have to repay the grant! There are some restrictions based on income, but if you plan on owner occupying you may qualify. Im not sure which lenders offer this grant, but if you google the program you can learn more information.

Best of luck

Jeffrey Gagnon · Answer

I believe you would have to pay closing costs. I just got approved for a VA loan, i don't need to put any money down but my closing costs from 100k -200k is $5000-$8000 in closing costs.