FHA Appraisal & GFE

[Anonymous]

Does everything on an fha appraisal have to be fixed in order for the loan to go through? Its an older home in good condition and there had been a lot of work done to it already. The biggest problems I think I'm going to have trouble with is a small area of water damage on the ceiling and there's no gutters on the house. The other few things can easily be fixed. The house is banked owned and when I had found out I asked my LO if that was ok before I put in the offer. Is it most likely they are going to deny the loan because the house has no gutters? I really doubt the bank would fix it.

Also do these GFE"s seem right

fha 5.25 interest

803  $485  appraisal

804  $35    credit report

809  $483.26 orgination fee

810  $84 tax service

811 $26 flood check fee

901  $238.20 30 days of interest

902  $949.92  fha upfront

903  $504 hazard insurance (i know this will increase because of the insurance i chose)

1001 $126 Hazard insurance

1003 $136 taxes

1105 $100 Document Preparation

1108 $218.40 Title insurance

1109 $200 Settlement agent/escrow

1110 $20 courier/express mail-clsng

1201 $50 recording fees

I dont think I have as many fees as others and I'm worried about extra things popping up

[ShanetheMortgageMan]

Anything that the appraiser lists as preventing the home from meeting FHA's minimum property standards will need to be fixed before you are able to close on the home... OR you can choose to get an FHA 203k loan to purchase the home + finance the cost of the repairs the appraiser has noted.  Gutters are not always needed if the grading of the land would divert water away from the foundation, if any evidence of standing water that is likely a sign that the home does not have proper drainage.

Your GFE looks appropriate.  Some states have higher costs, others have lower costs, appears you are in a state that has lower costs. 

Message Edited by ShanetheMortgageMan on 09-26-2009 10:42 PM

[Anonymous]

There was no standing water at all. If they have that streamline loan would it be hard to switch the loan? Or would everything have to start over again. Even though it seems like such a big process for very little things. Are there any ideas of how to work something out with the bank to?

[Anonymous]

oopps ment 203k loan.. i was reading off their website at the same time...

[ShanetheMortgageMan]

There is the full version of the 203k, and then the 203k streamline, the 203k streamline limits improvements/repairs to $35k and many more lenders do that, but you should still be able to find the full version of the 203k.  I've never had to switch a 203b (the regular FHA loan) to a 203k before, but I don't imagine it'd pose much of an issue.  On Monday a good question to ask your loan officer is if they offer either of the 203k options.  With bank owned properties I haven't known any to do any repairs, they are almost always sold "as is".  If there are repairs needed to be done, the buyer usually has to do them before they buy the home.

[Anonymous]

i'll ask him tommorow about the different loans. i dont even mind getting the work done now if i know for certain there will be no other problems closing the loan and if they dont mind me choosing someone thats not like a big contractor.

[ShanetheMortgageMan]

Your contractor will have to be approved, typically they need to provide a resume with references, a copy of the cost estimate, and your agreement with the contractor.

[Anonymous]

that shouldnt be a problem but small contractors are self employeed n some not used to dealing with much paperwork. i was doing some searching and a lot of stuff said gutters arent required. just has to be proper drainage away from house. one plus of living in wv great drainage just dont live at the bottom. but for things like putring a plate on electrical box or rehanging a small area of insulation would they really make u hire someone to come out?

[ShanetheMortgageMan]

If you can document experience (licensed to do electrical work) then they'll permit you to do it, but otherwise no a contractor is almost always needed.  A plate on an electrical box and insulation should only be a few hundred bucks, the increased costs of doing a 203k version of FHA will easily surpass that...if that's all there is you could be spending a dollar to save a dime.  It's also in your best interest that the contractor you choose is very experienced and is used to providing that paperwork, if they aren't then a contractor disaster is likely awaiting down the road.  Underestimates & extensions are the two most common issues when dealing with contractors, and seem to happen more often when doing 203k loans than you just paying them out of your own pocket.

[Anonymous]

I'd rather pay out of pocket for the repairs if i am able to. I still havent heard from my LO yet. the appraisal was done on the 19th and they've had it since the 23rd. They are still waiting for me to  send them one sept statement so i guess they are waiting for it before they send it back to the underwriter.