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Closing costs of FHA homes

by Amber
(Jeffersonville, In)

I am wanting to purchase a small single family home for myself and I don't make a whole lot. I read about the debt to income ratio and I'm good on that.

If I'm wanting to purchase a $65,000 home and I put down the needed 3.5%, which let's say is $2,600, how much more am I going to have to pay? Can I add the closing costs onto my mortgage?

I can't afford to dish out $6,000 or more as a down payment, closing costs, and other things because I have to purchase furniture and I don't have any at all to take with me, not even a mattress.

Can someone help me with the math? $65,000 home, I put down $2,600. What potential costs would I need upfront and roughly how much TOTAL? Thank you.

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Closing costs of FHA homes answer
by: Jeffrey

Hello Amber,

Thank you for visiting our site and asking your questions. When it comes to FHA mortgages, the minimum down payment, as you stated, is 3.5%. Closing costs on a FHA mortgage could cost you an additional 3% or more.

Sometimes you can use seller concessions up to 6% of the loan amount if the house will appraise for that much. This can be added on top of your mortgage if the seller is willing to give back your closing costs. It's kind of a unique way to finance your closing costs into your mortgage.

So what you have to do is negotiate the best price for the home and then later do an addendum to increase the price of the home to cover your closing costs. The seller has to agree and in most cases they will because they still net the negotiated price.

You asked about potential costs besides the down payment, they usually consist of property taxes, home owner insurance, appraisal, home inspections, credit report, and other costs such as title company fees and owner's/lender's title policy. It's hard to give an exact number for all these things. Once you apply for a mortgage, you will receive a loan estimate of all your costs.

It is hard to give you rough property tax cost as that amount will be different depending on when you close on the home.

I have a calculator on this website to help in estimating your closing costs.

Hope this helps. If you have further questions, just comment on this post.

Regards,
Jeff

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