I got a quote from a wells fargo loan officer stating the closing costs for a 203k loan was going to be 8k on a 105k loan. This seems really high to me. Am I wrong? Help me BP!
A few weeks back I had a client complain of closing costs being higher than expected on a 203k. The best thing you can do is reach out to other banks and get estimates from them. I know in the DC area Movement Bank, MVB Bank and First Home are all active on 203ks. Not sure if they cover Virginia Beach. PM me and I can give you contact info for a loan officer that will be able to answer general questions.
When you look at the alternatives the 203k costs come back in line very well. You only pay points and closing costs once with a 203k while your typical construction loan is after you already close and pay points and closing costs, then you pay them again on the construction loan and realize they want this construction loan paid off in 6-12 months and you will then pay closing costs again.
The maximum amount of money a lender will give you under an FHA 203k depends on the type of loan you get (regular vs. streamlined). With a regular FHA 203k, the maximum amount you can get is the lesser of these two amounts: 1) the as-is value of the property plus repair costs, or 2) 110 percent of the estimated value of the property once you do the repairs.
You'd have to be more specific, and break it down for us. We have no idea how much of that is prepaid property taxes, insurance, etc.
@Sean Ploskina Closing cost on a FHA 203(k) loan will be higher then a typical loan as there is additional cost (title update, inspections, permits, etc.).
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