How much up front do you think I need?

Question

I want to be an owner occupant for a Multifamily unit. If the value of the unit is 170k and I get FHA loan, how much do you estimate ill need up front for closing, moving in, etc.

Also can I add repairs to the loan amount with FHA?

Thanks!

Steve Babiak · Answer

If buying in PA, don't forget transfer taxes.  That depends on the actual location in the state unfortunately, plus it depends on whether the customary 50//50 split was negotiated or something else.  total transfer tax is 4% or so in Phila, so a customary even split would put 2% on the buyer and 2% on the seller.

I believe a 203K is needed to include repairs.

James H. · Answer

when evaluating buy and hold deals (150K and under) I come out to these two numbers that are minimum amounts to have:

Owner Occ investment - $10,000
Non Owner Occ investment - $20,000

For one reason or another, whatever differences there are between properties (need for rehab or not) in the up to 150K range (don't normally look at anything above that price), one thing balances out another and 10K and 20K tend to regularly pop up as a minimum amount I need. So when I save up money, I am saving with a 10 to 20K goal in mind. In your case, you might want to add a couple thousand more. Some of the trappings of Owner OCC investing that get overlooked a lot are things like appliances and curtains and furniture... Some times you need these things, sometimes you don't.

J Scott · Answer

For a typical FHA loan, you'll pay for:

- 3.5% down-payment (about $6000)
- Inspection costs
- Appraisal costs
- Buyer-paid closing costs
- Pro-rated taxes, insurance

In Georgia, on a $170K property, the closing costs will probably be about $1500.  Inspection/appraisal could run $1000.

So, you're looking at about $8500, plus your pro-rations...though a good mortgage broker could probably tell you exactly how much...