Pennsylvania Home Buyer FAQ
Q. How do I buy a house?
A. The first step is to find out whether you qualify for a mortgage. Please read the Home Buying Tips before you meet with the mortgage loan officer.
Q. I'm a first time home buyer in Pennsylvania. What programs are available?
A. The State of Pennsylvania provides low interest mortgages to first time homebuyers and buyers who are not first time homebuyers who purchase in "targeted counties" and certain census tracts. Please read the page for PA First Time Programs. You should also know that several PA counties also provide similar financing. PA First Time Home Buyer Programs Q. How much does it cost to buy a home?
A. I have created a variety of mortgage calculators to estimate your monthly mortgage payment and required cash at closing. I invite you to use these CALCULATORS to gain an understanding of the down payment and closing costs. These calculators will estimate FHA, VA and conventional mortgages. Needless to say, these calculators are intended for illustrative purposes only. Consult a mortgage professional for accurate costs.
Q. What's the maximum seller assist?
A. FHA, VA and conventional mortgages (loans underwritten to Fannie Mae and Freddie Mac guidelines) permit the seller to pay a percentage of your closing and escrow costs. Your cash at closing consists of three components |down payment | closing costs |escrow and prepaid costs|. The seller assist limit is based on the type of mortgage. For example, an FHA mortgage limits the "seller assist" to 6% of the sales price. The VA permits the seller to pay all closing costs and the escrow and prepaids up to 4% of the sales price. For a conventional loan, the seller is permitted to pay 3% of the sales price when your down payment is less than 10%. For down payments of 10% - 24%, the seller can pay up to 6% of the sales price. For down payments of 25% or more, the seller can pay up to 9% of the sales price. Consult with a mortgage professional concerning limits and allowable costs paid under these mortgage programs. Seller Assist
Q. Which is better, asking the seller to pay a seller assist or making a lower offer?
A. Let's run a scenario and you decide.
The following example assumes that the house is listed at $100,000 and the seller desires to "net", or sell the house for $94,000. This example also assumes that the real estate taxes are $3,600 per year, and the homeowners insurance is $480 per year. The purchase takes place in Allegheny County, PA.
Column 1 - Sales price of $100,000 with a 6% seller assist ($6,000) - FHA mortgage
Column 2 - Sales price of $94,000 no seller assist - FHA mortgage As you can see, your total cash to purchase this home is less in Column 1, because the seller is paying $6,000 (6% X sales price) toward your closing costs. However, the payment is higher than in column 2 because the mortgage amount is higher. | CLOSING COSTS | | COLUMN 1 | | COLUMN 2 | | MONTHLY PAYMENT | | $972.92 | | $934.95 | | TOTAL CASH TO PURCHASE | | $4,847.43 | | $10,507.07 | | | | | | | | Mortgage Program | | FHA | | FHA | | | | | | | | SALES PRICE | | $100,000.00 | | $94,000.00 | | Annual Real Estate Taxes | | $3,600.00 | | $3,600.00 | | Annual Homeowners Insurance | | $480.00 | | $480.00 | | | | | | | | Down Payment Percentage | | 3.50% | | 3.50% | | | | | | | | Interest Rate | | 6.000 % | | 6.000 % | | Term | | 30 Years | | 30 Years | | Point(s) | | | | | | | | | | | | Seller Assist Percentage | | 6% | | 0% | | | | | | | | Deed Transfer Tax To Buyer | | 1.00% | | 1.00% | | DETAILS OF THE TRANSACTION | | | | | | | | | | | | DOWN PAYMENT AMOUNT | | $3,500.00 | | $3,290.00 | | CLOSING COSTS | | $2,614.75 | | $2,518.75 | | ESCROW | | $4,732.68 | | $4,698.32 | | Less Earnest Money Deposit | | $0.00 | | $0.00 | | Less Seller Assist | | $6,000.00 | | $0.00 | | TOTAL CASH TO PURCHASE | | $4,847.43 | | $10,507.07 | | CLOSING COSTS | | | | | | CLOSING COSTS: | | | | | | Appraisal Fee | | $300.00 | | $300.00 | | Courier Fee | | | | | | Credit Report | | $18.00 | | $18.00 | | Deed Transfer Tax | | $1,000.00 | | $940.00 | | Discount Point (s) | | $0.00 | | $0.00 | | Document Preparation | | | | | | Flood Certification | | $18.00 | | $18.00 | | Mortgage Broker Fee | | $0.00 | | $0.00 | | Notary Fee | | $25.00 | | $25.00 | | Origination Points (s) | | $0.00 | | $0.00 | | Pest Inspection | | | | | | Processing Fee | | $0.00 | | $0.00 | | Real Estate Agency Fee | | $0.00 | | $0.00 | | Recording Fees | | $120.00 | | $120.00 | | Septic Inspection | | | | | | Settlement Fee | | $125.00 | | $125.00 | | Survey | | | | | | Tax Service | | $0.00 | | $0.00 | | Title Endorsement | | $150.00 | | $150.00 | | Title Insurance (Basic) | | $858.75 | | $822.75 | | Underwriting Fee | | $0.00 | | $0.00 | | Well Inspection | | | | | | TOTAL CLOSING COST | | $2,614.75 | | $2,518.75 | | ESCROW & PRORATIONS | | | | | | ESCROW & PREPAID COSTS: | | | | | | 30 days per diem | | $484.22 | | $455.17 | | Hm Insurance Policy | | $480.00 | | $480.00 | | Hm Insurance Escrow | | $80.00 | | $80.00 | | MIP | PMI ESCROW | | $88.46 | | $83.15 | | RE Tax & Proration | | $3,600.00 | | $3,600.00 | | FHA/VA Funding Fee (Financed) | | $1,688.75 | | $1,587.43 | | TOTAL PREPAIDS | | $6,421.43 | | $6,285.74 | | | | | | | | MORTGAGE AMOUNT | | $98,188.75 | | $92,297.43 | | INTEREST RATE | | 6.000 % | | 6.000 % | | TERM | | 30 Years | | 30 Years | | | | | | | | MORTGAGE PAYMENT: | | | | | | Principal & Interest | | $588.69 | | $553.37 | | Homeowners Insurance | | $300.00 | | $300.00 | | Real Estate Taxes | | $40.00 | | $40.00 | | MIP/PMI | | $44.23 | | $41.58 | | Condo | Hm Assn Monthly Fee | | $0.00 | | $0.00 | | MONTHLY PAYMENT | | $972.92 | | $934.95 |
Common Questions for First Time Homebuyers The Department of Housing and Urban Development (HUD) has terrific information on their web site. Click on this link Common Questions to go to the HUD web site for frequently asked questions. |
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If you're like most home buyers in Pennsylvania, you have questions about mortgage loan financing. The following mortgage calculators will estimate your mortgage payment, calculate the cash at closing, and estimate your mortgage payment based on your monthly debt and income. Scroll down for information on the seller assist and frequently asked questions about the home buying process. 
