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Replies (9)
- Andrew Adams, "203K Specialist"
- Contributions:9342
Is it a multi family, how many units?
- Iamjessemoore
- Contributions:5
4 unit multi-family
We will be living in one unit.
- Joe Cafiero, "Superior HM Mortgage"
- Contributions:3136
What is the reasoning for the 3 months of expenses? Depending on your file, maybe he feels that you need 3 months of reserves. In that case $2000 a month is kind of low for your mortgage payment.
- Iamjessemoore
- Contributions:5
How much would you say I would need in savings?
- Joe Cafiero, "Superior HM Mortgage"
- Contributions:3136
How much is your mortgage payment taxes and insurance included? Take that and multiply by 3. That is taking into account that the rest of your file is clean and no additional reserves are needed to compensate for other factors.
- Andrew Adams, "203K Specialist"
- Contributions:9342
Add the 3% minimum cash investment to that and that's the number.
- Michael Yaeger, "yaegermike"
- Contributions:754
Cash Reserves
Although cash reserves after closing are not required on FHA insured mortgages (except on 3-4 unit purchase transactions), cash reserves should be considered in the overall risk assessment for purchase transactions. The following are the cash reserve requirements applicable to purchase loans (there are no requirements for refinance transactions).
1-2 Unit Properties
No cash reserves are required.
3 and 4 Unit Properties
Reserves of three months mortgage payments (principal, interest, taxes and insurance (PITI)) must be available after closing.
Note
The following types of assets cannot be considered as cash reserves:
The non-vested amount and/or the amount being used as security in 401(K)s, IRAs, and thrift savings plans,
Equity in other properties and proceeds from a cash-out refinance
For FHA loans, you need to put 3% of the purchase price into the transaction. The seller can pay all your closing costs and pre-paids up to 6% of the purchase price. Beyond that, FHA does not have a cash reserve requirement. However, some underwriters may require you to have 2 - 3 months mortgage payment reserves (PITI, or principal, interest, taxes, insurance) and MIP (mortgage insurance premium) in the bank after closing.
- Joe Cafiero, "Superior HM Mortgage"
- Contributions:3136
Lew...If you actually read the thread you will see that it is a 4 Family and Yeager already postsed the guidleines which includes a 3 month reserve requirement
FHA question
I have already have a contract on a property and I am trying figure out exactly how much we need in savings for the loan to go through.
Contract price in $284,000 with seller covering all closing costs.
Our morgage broker once said this:
3% down payment- $8500
3 months expenses- roughly $6000
Total:$14500
Now he is not giving us a more exact number on the 3 months expenses.
If we have $14700 is that enough or should I raise more before closing?
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