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Old 11-25-2013, 06:55 AM
 
2 posts, read 1,451 times
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My wife and I are finally ready to purchase our first home and we are looking in the northern outskirts of the Atlanta area. We were pre-approved for a conventional loan from Bank of America with 5% down and are just overwhelmed with all of the procedures and processes of everything. I was hoping someone could help clarify some things.

1. Given the fact that we are only putting 5% down (we were recently living in one of the most expensive areas in the country, so we have not been able to save up a sizable down payment unfortunately), are we better off going with a conventional mortgage over an FHA as long as the bank already approved us? Bank of America already gave us the pre-approval information and the Truth-In-Lending GFE documentation. I know FHA loans require less down (3.5%) but our understanding is that if we are approved for the conventional we should not even look at FHA. Is that right?

2. Are home inspections mandatory? I did not see any inspection payment estimates in the GFE document we were provided. My understanding was that a home inspection is pretty much required.

3. Who pays for the buyer agent's commission? I am reading conflicting articles. Some mention that our agent's commission is paid out by the seller and is taken from the final price, others mention that we pay it and we can negotiate for the seller to provide some funds for the fees.

4. How are closing costs paid? Are they held in escrow once a contract is signed and withdrawn from there, or are we expected to come to closing with a check written out (if so, to who?) for the total amount.

5. Overall, how fast does the process move forward? We are trying to time our purchase to get as close as possible to the end of our rental lease, which is in Q1 2014.

We are meeting with our agent this weekend but it's always good to go in knowing some of the process rather than being completely blind. Thanks.
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Old 11-25-2013, 11:26 AM
 
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1. Conventional 5% down is way better in the long run, as, with your credit, the mortgage insurance component will be much less per month, and it will eventually expire, whereas FHA's is forever.
2. Get an inspection. Lender likely didn't quote it so as to not bloat the initial fee pitch.
3. Seller.
4. Either out of pocket, at closing, or you can negotiate that the seller pay them, usually by NOT negotiating the price down to point where you could if you were paying them out of pocket. However, in the interest of optimizing your cashflow and loan, I'd suggest a 5% down Conventional loan with the seller paying taxes, insurance, and closing costs.
5. If you went to Contract today, and you were a responsive, non-tantrum-throwing borrower, and your income is pretty cut and dried, you could close before Christmas. But - big banks might take longer, as their support staffs take holiday vacations, thus tightening the funnel effect.
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Old 11-25-2013, 11:45 AM
 
2 posts, read 1,451 times
Reputation: 10
Quote:
Originally Posted by Pfhtex View Post
1. Conventional 5% down is way better in the long run, as, with your credit, the mortgage insurance component will be much less per month, and it will eventually expire, whereas FHA's is forever.
2. Get an inspection. Lender likely didn't quote it so as to not bloat the initial fee pitch.
3. Seller.
4. Either out of pocket, at closing, or you can negotiate that the seller pay them, usually by NOT negotiating the price down to point where you could if you were paying them out of pocket. However, in the interest of optimizing your cashflow and loan, I'd suggest a 5% down Conventional loan with the seller paying taxes, insurance, and closing costs.
5. If you went to Contract today, and you were a responsive, non-tantrum-throwing borrower, and your income is pretty cut and dried, you could close before Christmas. But - big banks might take longer, as their support staffs take holiday vacations, thus tightening the funnel effect.
Thanks. Our credits are the highest tier reported according to the bank (760+ each) and our combined income is over 120,000/yr. Overall the only issue is the lower down payment than we would like but we are tired of paying someone else's mortgage. We are paying 1500/mo for rent and a mortgage is about 800/mo for what we are looking for. With PMI/etc. it goes up to around 1200. We are realistic with our price range and will hope to close by March.

Thanks again.
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