Costs to purchase first home - FHA loan

4 Replies


I am looking to purchase my first property owner occupied and cash out after 6 months to turn into a rental. I received a pre-approval for $198,500 at 3.250% for an FHA loan. I will need to bring to the table $12,725.56 for the 3.5% down payment and all closing costs. I am looking to finalize the contract to purchase the home.

What are my options to come up with the $12,725.56 for the out of pocket costs with an FHA loan?

Thank you for your help in advance! 

Not sure what your plan is on your cash out refi in 6 months, but you'd need a good amount of equity in your home to get approved for a cash out refi & FHA requires you to live in your owner occupied home for 12months , just a heads up

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Originally posted by @Nicole Jones :

@Chris M. Sorry if this is a stupid question but what do you mean by seller credit and lender credit? 

 Seller credit.

Suppose you want to offer $400k, but also want to finance the bulk of $5k in closing costs. Offer $405k with a $5k seller credit. An intelligent seller will view this as a $400k offer, but oh look here's the better part of $5k still in your pocket at the end of the transaction.

Lender credit: inverse of discount points. Instead of bribing the lender to give you a lower rate, you're accepting a bribe to take a higher rate. Popular with flippers, for the inverse of the reason that discount points are popular with folks buying a home to retire and die in.