1. What is FHA Cash to Close?

FHA Cash to Close represents the total amount of money a homebuyer needs to bring to the closing table when purchasing a home with an FHA loan. It includes the down payment plus all closing costs associated with the mortgage transaction.

2. How Does the Calculator Work?

The calculator uses the FHA Cash to Close formula:

Where:

• \( CTC \) — Cash to Close (total amount due at closing)
• \( DP \) — Down Payment (minimum 3.5% of purchase price for FHA loans)
• \( CC \) — Closing Costs (typically 2-5% of loan amount)

Explanation: This calculation provides the total upfront cash requirement for an FHA mortgage, excluding any prepaid items or escrow deposits.

3. Importance of Cash to Close Calculation

Details: Accurate cash to close calculation is crucial for homebuyers to ensure they have sufficient funds available for closing, avoid last-minute financial surprises, and properly budget for their home purchase.

4. Using the Calculator

Tips: Enter the down payment amount in dollars and the total closing costs in dollars. Both values must be non-negative numbers. The calculator will sum these amounts to determine your total cash to close requirement.

5. Frequently Asked Questions (FAQ)

Q1: What is included in FHA closing costs?
A: FHA closing costs typically include loan origination fees, appraisal fees, title insurance, credit report fees, prepaid interest, and other third-party services required for the mortgage process.

Q2: Can closing costs be rolled into an FHA loan?
A: No, FHA loans require closing costs to be paid separately and cannot be financed into the loan amount. However, sellers may contribute up to 6% of the purchase price toward closing costs.

Q3: What is the minimum down payment for FHA loans?
A: The minimum down payment for FHA loans is 3.5% of the purchase price for borrowers with a credit score of 580 or higher.

Q4: Are there any additional upfront costs with FHA loans?
A: Yes, FHA loans require an upfront mortgage insurance premium (UFMIP) of 1.75% of the base loan amount, which is typically financed into the loan rather than paid at closing.

Q5: How accurate is this calculator for actual closing?
A: This calculator provides an estimate. Actual cash to close may vary based on specific lender fees, prepaid items, escrow requirements, and any seller contributions or lender credits.