Oh and by the way, if you do this, DO NOT, I repeat, DO NOT use an inspector recommended by your agent or skimp on the inspections process. Make sure they check out EVERYTHING - roof, masonry, plumbing, major systems, structural integrity. Do the mold/radon tests and the like. You do not want unknown issues creeping up after you move in.

Anonymous wrote:How much did you guys end up spending on closing costs, inspections etc?

Our purchase price was $285K and I think our closing costs were around $4K or $5K. Realistically you probably need access to about $15K in cash at a minimum to close on a moderately priced home.

The down payment required for FHA is now 3.5%, and you should have and additional 3% of the purchase price in reserve for closing costs, including inspections, title insurance, homeowners insurance and property tax escrows and other fees. Another thing to note is that PMI used to be automatically removable once you could show that you had reached 20% equity; now it is more difficult to do that to the point of probably necessitating a refinance. The good news is that FHA loans are assumable, so when you sell some years later when rates are almost assured of being higher, your buyer can assume your loan with its record low interest rate and that makes your home a very attractive listing.

How much did you guys end up spending on closing costs, inspections etc?

We did this -- and as PP said we were approved for a laughably high number, so just remember to be realistic. Also we were a little surprised by all of the things that required cash -- we knew we'd need 3% down payment, but other things like inspections, closing costs, etc were surprising (we were painfully naive about the whole process tho!)

We did this. The approval process can be onerous but worth it if you have stable employment, a good credit score, and find the right property since rates are the lowest they can realistically be. Yes, PP is correct it is a 3% down payment and you will need cash for closing. It doesn't hurt to get pre-approved and talk to a lender or realtor about how much cash you'd need on hand to close. Just be careful - you will likely be approved for more than you can honestly afford. Put together a budget that reflects what you can truly allocate to housing costs, and keep in mind that you will be required to pay for mortgage insurance (PMI) with an FHA loan. All of this will be rolled into your payment but even with a fixed loan the payment can vary year to year based on PMI and property tax. You also have to be realistic about the costs of maintenance. If you don't plan ahead and budget for needed repairs, you will regret it, trust me.

Think long and hard about the tradeoffs and the financial pros and cons. Yes, building equity is nice, but if you have an older home maintenance can hit your finances harder than you imagined and eat into the equity you are building.

Oops. Just realized I should've posted this in the real estate forum. Thanks!

Yeah, you will still need some sort of down payment plus cash for extras.

It's my understanding you need at least 3% downpayment for an FHA loan. I don't think there exists a loan program available to someone with no downpayment (not like the good old days of 2004 or so) and you'd need closing fees, too. I might be wrong, so other posters, feel free to correct me.

Hello. Single 26 year old female here. No kids. I make $40,000 / year. I have little debt and no savings. In another thread, it was mentioned to buy soon and take advantage of the FHA loans available.
Can anyone offer me some free advice?
I am in Massachusetts. I would love to own a home but I have zero down payment (let alone the closing fees and whatever other fees are needed), but a steady job.
Should I look more into this? What exactly is an FHA loan? I've googled it, but I don't fully understand it, and wanted to hear from people in my shoes who have looked into it, done it, have experience, etc.