203k Newbie Questions

[Michael Sellers]

Hi everyone,

I've been doing some research on FHA 203k loans, and I'm a complete newbie to investing so I still have a few questions. I've seen online (usbank.com) that the current average rate for a regular 30-yr FHA loan is 2.625% and the APR is 3.678%, and that I should expect a 203k loan to be roughly 1% higher (3.625% rate, 4.678% APR). I assume these are relatively accurate numbers, but I have little experience so it's possible I'm not researching in the right places. Please correct me if those are inaccurate numbers. I have also seen that I should anticipate roughly 0.85%-1% extra for PMI. My question here is whether or not that extra % for PMI still needs to be accounted for, or is it already baked into the percentages above?

My second question has to do with the points charged and other closing costs. I've seen that I should expect to be charged around 1.75%, or 1.75 points (themortgagereports.com). Again, if this is not an accurate number in your experience please let me know. I know that you have to hire a HUD consultant if the renovation is large enough, but are there any other closing costs involved in a 203k loan besides the typical closing costs of a conventional loan (i.e. property taxes, insurance, appraisal, etc)?