FHA Loan and Seller Concessions/Credits

[Gronnie]

There is a house that we want to make an offer on. Everything is perfect except it could really use new carpet. We would like the sellers to pay for the carpet. We don't want to have them do it; we want to do it ourselves because my mother-in-law runs a carpet store and can get us a great price. Can we ask the sellers to pay both closing costs/prepaids and give a credit for new carpet? Loan will be 3.5% down 15 year FHA.

Edited January 17, 2012 by Gronnie

[Brian B The Loan Professor]

There is a house that we want to make an offer on. Everything is perfect except it could really use new carpet. We would like the sellers to pay for the carpet. We don't want to have them do it; we want to do it ourselves because my mother-in-law runs a carpet store and can get us a great price. Can we ask the sellers to pay both closing costs/prepaids and give a credit for new carpet? Loan will be 3.5% down 15 year FHA.

Most banks will not let you get cash back to do work after the close -

B

[Gronnie]

So if we want them to pay for it we have to have them do it before closing then?

[Brian B The Loan Professor]

Yes typically that is how it would work - or maybe get them to drop the price that amount and then you pay for it yourself

[Gronnie]

We made an offer this morning. Offered a bit less because of the carpet. We just wanted it to be part of the loan since rates are so low. Oh well, we'll manage.

[Brian B The Loan Professor]

Good Luck with the offer -

[Gronnie]

Thanks! ***fingers crossed*** We offered 185,000 and they cover 6,500 closing costs and prepaids. House listed at 199,900.

[Gronnie]

Grrrrrr...... seller is out of town and offer isn't being presented until tomorrow evening. This is making me so anxious!

[Gronnie]

We accepted buyers counter offer tonight. 196,000 with 6,500 paid by seller for closing/prepaids. Hopefully mortgage company will let me pay LVNV at closing through the title company or attorney, as I don't want to deal with it. I hate those bastards.

[Gronnie]

Anybody know what the current rate for a 15 year fixed FHA is right now? I swear I've seen 3.0-3.25% with no points, and 2.75-3.0 buying a point, but the guy I'm working with at Associated Bank says the best he can do is like 3.5. We are looking to rate lock here soon and and trying to decide between a 15 year fixed FHA and a 30 year fixed FHA.

 

If we choose 15, I guess we are going to have to go elsewhere? Are we going to have enough time to go elsewhere and still close by March 2nd?

[Brian B The Loan Professor]

I am seeing 3.5% paying you 1% on a 40 day lock - which is about what you would need to lock right now

15 year pricing is a little different than 30 - I believe it is how they are bundled and resold that causes this

for the 30 we see pricing at every 1/8th percent however when I looked for you right now I saw 3.5% paying a point credit

and 3% costing 2 points - Nothing in between.

I dont think you will see less than 3% unless you find someone working for free and if they dont get their money on the rate they may try to get it somewhere else. I see Wells is at 3.25% charging 1 point so that all sounds right - if they are not giving you any credit at 3.5% you may consider looking elsewhere - you still have time - if the appraisal has been done then that would have to be transferred

[boomhower1820]

I locked at 3.5% last week with an FHA a Wells Fargo on a 15 year last week, that was with them paying a credit. 30 year option was 3.875%. That seems to be the going rate right now with FHA, I haven't seen anyone else offering any lower.

Edited January 24, 2012 by boomhower1820

[Gronnie]

So if I am paying a point (sellers agreed to pay all closing costs, prepaids, plus 1 point for us) and not getting any lender credit, what is a fair rate? I think I'm starting to understand all this stuff, but just want to make sure.

 

 

edit: Looks like US bank has 3.25% no points, or 3.00% paying a point if I'm reading this right? http://usbank.com/cgi_w/cfm/personal/products_and_services/mortgage/interest_rates.cfm

Edited January 24, 2012 by Gronnie

[Brian B The Loan Professor]

3.25 but rates do change daily who knows if it will be the same tomorrow

[Gronnie]

Thanks for encouraging me to look elsewhere. Met with guy at US Bank and not only can we get 2.75% if we go with a 15 year; they will pay to buydown the loan from 3.75% to 2.75% for the first year on a 30 year. That would save us $1260 the first year if we decided to go with a 30 year.

[Gronnie]

Did a 60 day rate lock with US Bank today. 15 year FHA at 2.75%. $196,000 purchase price, 3.5% down.

 

Initial Loan Amount: 191,031

Loan Term: 15 Years

Interest rate: 2.75%

Principal, interest, estimated mortgage insurance: $1,373.32/mo

Origination fee: $2512.40-$716.37 credit=$1,796.03 adjusted origination charge

Appraisal: $465

Credit Report: $24.00

FHA UFMIP: $1,891 (financed)

Misc. Prepaid: $0.40

Title Services and lender's title insurance: $1053.80

Owner's title insurance: $470

Flood certification fee: $18.00

Government recording charges: $92.00

Transfer taxes (charged by State of MN): $439.37

Initial Escrow Deposit: $1,255.03

Prepaid Interest (2 days at 14.392747/day): 28.79

Estimated Hazard Insurance Premium: $1,000

 

Total needed for settlement: $6,642.42

 

How does the GFE look?

Edited February 3, 2012 by Gronnie

[jop3]

Did a 60 day rate lock with US Bank today. 15 year FHA at 2.75%. $196,000 purchase price, 3.5% down.

 

Initial Loan Amount: 191,031

Loan Term: 15 Years

Interest rate: 2.75%

Principal, interest, estimated mortgage insurance: $1,373.32/mo

Origination fee: $2512.40-$716.37 credit=$1,796.03 adjusted origination charge

Appraisal: $465

Credit Report: $24.00

FHA UFMIP: $1,891 (financed)

Misc. Prepaid: $0.40

Title Services and lender's title insurance: $1053.80

Owner's title insurance: $470

Flood certification fee: $18.00

Government recording charges: $92.00

Transfer taxes (charged by State of MN): $439.37

Initial Escrow Deposit: $1,255.03

Prepaid Interest (2 days at 14.392747/day): 28.79

Estimated Hazard Insurance Premium: $1,000

 

Total needed for settlement: $6,642.42

 

How does the GFE look?

 

awesome!!!

[Gronnie]

Don't think it matters on FHA but my mid score was 715 and my wife's was 696.

[boomhower1820]

2.75%! Wow!!

[Gronnie]

I know, it is a great rate. We could have gotten 2.75 for a year then 3.75 after that on a 30 year, but the permanent lower rate along with much lower MIP made me go with the 15.

[Gronnie]

Does anyone have a definitive answer as to whether or not MIP will be tax deductible after 12/31/2011? I could swear I read somewhere here that they didn't renew it, but my mortgage guy said that he hadn't hear that.

[Gronnie]

We are set to close on Friday the 30th at 8 am. My wife and me are very excited. Haven't gotten much sleep lately first because of going through making sure everything was going to be good to close and now because of the suspense of moving in soon.