Is it true that closing costs cannot be combined into an FHA loan?

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Question by missbiz85: Is it true that closing costs cannot be combined into an FHA loan?
My boyfriend and I are first time home buyers and are going to be purchasing a home with an FHA loan. Our mortgage broker said that the closing costs cannot be rolled into the loan because it’s an FHA. I couldn’t find anything that said that on the FHA website. I was hoping someone might have a little insight into what he’s talking about.

Best answer:

Answer by ibu guru
Officially, discount you need a minimum of 3.5% down plus closing costs to qualify for an FHA loan. However, advice FHA is in dire financial straits, purchase and we are not seeing FHA or other mortgages (even if approved) actually getting funded by closing. They seem to be developing “last-minute hitches” at a rather alarming rate.

1. Never buy property with an unrelated party. You are asking for trouble – very expensive trouble.

2. You need 20% down, plus closing costs, plus 3 – 6 months of reserves, plus credit score over 700, plus at least 3 years track record on the job to have a prayer of getting a mortgage and actually getting funded by closing.

3. Prices are still dropping! Plus subprime was only a preview of coming attractions. Foreclosures are now expanding into Alt-A, Option ARM, prime and jumbo prime markets. Resets and recasts of interest rates don’t peak until 2011-2012, which means accelerating foreclosures until 2012-2013.

You and your bf should not even be thinking about homebuying at present. If you marry, then you might start thinking about it – as long as you have the cash saved up and very secure job prospects.

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