All Forum Posts by: Kyle Gregg

@Alec Saenz

Yes, i was surprised too when seeing the total closing costs. Expect to pay around 6% of the total loan cost on top of your 3.5% down payment. 

These costs include lender fees, appraisals, inspection fees, upfront MIP, taxes, title company fees, HUD consultant fees, building permits, agent fees, survey fees, credit report fee...etc

That's why its SO important to get the seller to contribute towards closing costs or you'll be left with the entire tab. But since you're buying a bank owned property, that wont be an option. Be prepared to spend some money. 

Break down of my loan i just closed friday:

Purchase price of property: $87k

Rehab: $68k

Total loan amount: $169k

Total closing costs: $15k

-3.5% down payment: $6k (subtracted from total closing costs)

-Seller concessions of 3%: $3k (subtracted from total closing costs)

= additional $6k to close 

Dont let anyone tell you that 3.5% is all you have to pay for a FHA loan. I was told this by my Loan officer and it left me in a really messed up situation. She later on got fired for this and many other reasons. the bank ended up cutting me a FAT check to correct the situation. So PLEASE dont be fooled.

I am working a 203k right now and i was told i could refi only the interest after 6 months then i can do a cash out refi after 12 months. Please correct if i am wrong. 

CLOSING TOMORROW! after $6500 worth of lender credits, my final HUD came back and it looks good. I will pay my required 3.5% and that is it.

Thanks everyone for your input. 

Congrats on closing a 203k! its definitely a stressful process that requires a TON of patience. 

I am about to close on my first Full 203k this week. My bank has pushed back closing several times, totaling an entire month! Its been a very eye opening experience to the world of real estate and the mortgage process. 

Best of luck moving forward! 

If you decide to use a 203k loan, 3.5% down payment is a FRACTION of what you actually have to spend to close the loan. I made this mistake going into the 203k loan i am currently working on right now. My Loan Officer also made this false assumption and it ended up turning into a nightmare...but that's another story. 

3.5% will be your MINIMUM contribution. Expect to pay double or triple in settlement costs. I was able to get my seller to contribute 3% for closing costs but seeing that you are trying to buy a bank owned property, you wont have that option. 

Let me know if you have any specific questions. 

I was considering buying a 2 unit property not to far from the lake. Its definitely a nice area. 

Have you brought a contractor through to see what it might need in terms of rehab? He might be able to spot some things out that you might not have noticed which could help drive that asking price down. You dont want to drop this amount of money just to find out that the roof leaks and you have a serious mold issue in your attic...

@Nancy Roth

 I hope you didn't send too many people to nora...i have a horror story to tell

I am currently working my first 203k (and first home purchase of any kind) and a day away from closing. From my experience, don't reach out to only one lender. ALWAYS shop your loan. I only worked with one company and they ended up screwing me. 

As for contractors...i went to 203kcontractors.com and reached out to several companies. I met with them on separate occasions, walked the house, and told them what i wanted to accomplish. They all submitted their bids and i went with the most competent contractor (not necessarily the cheapest one). His specialty was rehabbing typical Baltimore row homes in the Patterson park area (where my house is). So its working out wells so far...we will see once rehab gets underway. 

Welcome to BP. I was a new comer to the world of REI about 8 months ago and i sat on BP constantly, just trying to soak up as much information as possible. Then i started listening to the podcast...soooo much good information and stories. On the podcasts they suggest books...so naturally i started reading books.

8 months later, i'm chin deep in a 203k loan and about to close on my first house. Its been a rough learning experience but i forced myself to dive right in. 

if you know anyone in the real estate business....agents, bankers, contractors, etc...definitely ask them questions. 

knowledge is key in this game. 

Where did you find your realtor?