FHA down payment % ?

[Anonymous]

I have applications into two places for $290,000 sales price.  Both show a loan amount of $284,747.  

I don't understand where the loan amount came from.  The difference is only 1.8% of the sales price.

I thought FHA required 3.5% down?? 

Thanks for any help.

[Anonymous]

It looks like the loan amount without MIP is $279,850, which is 3.5% of the$290,000 sales price.  

But then, they roll the MIP ($4,897) into the loan amount??  That's how they get to $284,747.

I don't understand that.  Almost half of the required down payment is rolled into the loan? 

[Anonymous]

take you total amount of your loan

Subtract the down payment

Add in the amount of mortgage insurance rolled into the loan

That should basicly be your loan amount.

[Anonymous]

Thanks for the response.  I guess the part I don't understand is that I didn't know they would roll part of the 3.5% down into the loan amount.  That makes my down payment amount about 1.8%.

Is that right? 

[Lel]

No, you still have to come up with the 3.5%.

Purchase price of $290,000 requires a down payment of  $10,150.  This bring the principal amount to $279,850.  Then you multiply the loan balance by 1.75% (soon to be 2.25%) to calculate the amount of the upfront MIP, which then gets added to the prinicipal amount.  That gives you the $284,747 figure.

[Anonymous]

Thanks Lel.  That makes sense, but the "Total Required for Settlement" amounts are both around $16,000.  That amount includes fees added on top of the $290K, which take the Total to around $300K, and the difference between 290K sales price and the $284K loan amount.

Am I missing fees somewhere?  My biggest concern is that I think I'm ready and I need to save more money.

Does it seem like the 16K is all I'll need? 

[Lel]

$10,000 of that is your down payment.  Are you paying any points?  A point would add about $2800 to your closing costs.  If you have a breakdown of your estimated closing costs, you could post it here and folks can see if it all seems reasonable.

[Anonymous]

Thanks Lel.  :-)  No points.  Here is what one of my sheets shows:

Sales Price: $290,000.00

Loan (without MIP/Funding Fee): $279,850.00

Loan (with MIP/Funding Fee): $284,747.00

Interest Rate: 5.000%

Loan Term: 360

Monthly Payment Estimate

---------------------------------------------

Principal and Interest: $1,528.59

Taxes: $550.00

Insurance: 96.67

PMI/FHA Mortgage Insurance: $127.41

TOTAL: $2,302.67

Estimated Loan Costs - Buyer

---------------------------------------------

Tax Related Service: $84.00

Application Fee: $465.00

Processing Fee: $300.00

Underwriting Fee: $295.00

Courier Fee: $65.00

Flood Certification: $14.00

Settlement Or Closing: $300.00

Title Insurance Fee: $175.00

Title Policy: $200.00

Title Search Fees: $5.00

Attorney Doc Review: $150.00

E-doc Closing Fee: $50.00

Recording/Filing Fee: $125.00

Pest Inspection Fee: $75.00

TOTAL: $2,303.00

Estimated Prepaid and Escrow Costs - Buyer

---------------------------------------------

Perdiem Interest 15 Days @ $39.01 = $585.15

Hazard Insurance Premium(1yr): $1,160.04

FHA/MIP/VA Funding Fee: $4897.38

TOTAL: $6,642.57

Hazard Insurance 3 months @ $96.67 = $290.01

Real Estate Taxes: $1,650.00

TOTAL: $1,940.01

Estimated Summary of Purchase

---------------------------------------------

Purchase Price: $290,000.00

Prepaids: $6,642.57

Escrows: $1,940.01

Loan Costs: $2,303.00

TOTAL: $300,885.58

Minus

Other Credit: $84.00

Mortgage Amount: $284,747.00

Estimated Cash Required For Settlement: $16,054.58

[Anonymous]

Can anyone tell how much I'll actually need to have on hand?  I can't tell if the down payment is in the Settlement Total or not.

Thanks!

[Lel]

Down payment $10,500 + loan costs $2303 + prepaid interest/homeowners (hazard) insurance $1745.19 + escrows (real estate taxes/3 months insurance) = $16,054.20.  Very close to what your documents state.  This does include your down payment.