How much money do I need to save for FHA?

[Anonymous]

I would like to buy a newly constructed condo for about $160k. The taxes are about $4k a month. HOA fee is $100 a month. I was going to pay the minimum 3.5% down. Any idea how much I need to bank to cover closing? How much should I have in reserves?

[Anonymous]

I paid 3.5% down. My closing including prepaids, our of pocket, escrows and good faith depost amounted to 5% of the loan. Total 8.5% of the loan.

[Anonymous]

8-9% is fairly normal.  Alot depends upon how the prepaids work out.  Close on the 30th and they are alot cheaper than closing on the first... 

Also,make sure the condo you want is FHA approved.

[Anonymous]

Why is it cheaper to close at the end of the month? What is a good faith deposit? Is that something you get back?

[Anonymous]

In the end it really is not, but you have to bring less to the table....Mainly it is due to the pre-paid interest.  If you close on the last day of the month, you will not pay any prepaid interest, but your payment will be due in roughly 30 days.  If you pay on the 1st, your will not have a payment for almost 60 days, but you will have to pre-pay 1 month's interest on the loan.  If you close on the 15ht you would have roughly 45 days until your payment was due and have roughly 1/2 month interest to pay at closing.

Good faith deposit is paid when you put an offer on the place.  you usually do not "get it back" but it is applied as oart of your down payment... This is not always the case though.  Also, expect to pay for home inspetion $200-400 and appraisal $200-$400.