Financing Your Lehigh Valley Home with an FHA Mortgage

 
I have touched on the topic of FHA mortgages in earlier posts but I felt the following information was critical when purchasing a Home.

The new FHA guidelines for 2009 require that a Lehigh Valley Home Buyer put at minimum 3.5% of their own money into the transaction. So, to purchase a $100,000 home, the buyer must use at least $3,500 of their own money. If they don't have it, they may receive a fully documented gift from a family member but there is no getting around the 3.5% minimum. The rest of the needed funds can be obtained using seller's assist.

When purchasing a home there are out-of-pocket expenses throughout the process. As long as these expenses are documented (with receipts) and paid by cash or check (not on a credit card) they can be counted towards the 3.5% minimum.

For instance, the following expenses typically occur during the home buying process:

Appraisal  ~$400.00
Home Inspection ~$350.00
Property or Hazard Insurance  ~$600.00

In the above example, these expenses add up to $1,350.00. As long as they were paid for by check or cash, this amount can be deducted from the $3,500 minimum required to purchase that $100,000 house. So, the home buyer would need to contribute $2,150.00 of their own money at the closing table. If they don't have it, chances are they will not be moving into the house.