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Old 06-22-2014, 11:45 PM
 
Location: New Orleans, LA
5 posts, read 51,233 times
Reputation: 15

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Hello All!!!!

I need HELP understanding what my husband and I will be paying out of pocket for our new construction home. We are in the process of purchasing a new construction home from DSLD Homes. We have signed our contract since Mid March and our anticipated closing day is September 16, 2014. Our slab has just been poured! Well the issues I have deal with this list of amounts of the prepaid items and closing costs.

So here it goes...

My purchase price for the home is $169,900.00
My estimated prepaid items is $3,411.30
My estimated closing costs is $3,366.25
My discount points total is $363.58

TOTAL = $177,041.13

Closing costs paid by seller is $4,974.00

TOTAL = $172,067.13

Minus Sale Price of Home $169,900.00

EQUALS


Cash From/To Borrower = $2,167.13

So, my question is: Am I paying the $3,411.30, $3,411.30 plus $2,167.13, or $2,167.13? Also, the seller is providing a credit at closing for the property taxes from January 1st through the day of closing (September 16th).

Thanks for your help!!! And please respond!!!!!!
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Old 06-23-2014, 12:16 AM
 
Location: deep woods
404 posts, read 699,602 times
Reputation: 564
Default exam

This is a test, right?

You are “paying” a net total of $172,067.13 less the credit at closing for the proration of taxes and +/- any other prorations, assuming LA taxes are paid in arrears.

However it appears that you are getting a loan,
and to know what you are paying out of pocket:
Do you know the amount of your loan?
Have you made a deposit?
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Old 06-23-2014, 12:49 AM
 
Location: New Orleans, LA
5 posts, read 51,233 times
Reputation: 15
No this is not a test. We have obtained a VA mortgage loan. Therefore no down payment required, no PMI required. The purchase price of the home under construction is $169,900 so our loan amount is also $169,900.
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Old 06-23-2014, 10:50 AM
 
3,635 posts, read 7,881,638 times
Reputation: 4593
In those numbers may be hidden a rolled-in VA Funding Fee. This is nice (to not have to pay it out of pocket), but it can make the math confusing!

$3,411.30 plus $2,167.13 plus 363.58 minus 4,974 = 2167.13.

But: 90 days away from closing, a lot can happen. Did the lender lock the rate? Are there contingencies if weather delays construction?

Bottom line, if you can mark out your name and post the Itemization of Fees sheet, we can see more clearly what's up. Also, I apologize and thank you, but I must ask if the Veteran (you, your husband, both?) carries a service-related disability, and if so, what percentage?

Thank you!
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Old 06-25-2014, 12:13 AM
 
Location: New Orleans, LA
5 posts, read 51,233 times
Reputation: 15
It's not letting me attach the file. But based on the figures I've given you, what would our out of pocket be? Is it the $3411.30 or the $2167.13? Also, my husband is a disabled veteran, so our VA funding fee is waived.
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Old 06-25-2014, 01:49 AM
 
3,635 posts, read 7,881,638 times
Reputation: 4593
Please don't hold me to this, but it's looking like the lower number. BUT your numbers are going to change a bit as they congeal toward closing. If the closing date changes substantially, that will also affect things.
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Old 06-25-2014, 08:25 AM
 
Location: deep woods
404 posts, read 699,602 times
Reputation: 564
Default cash from

Your lender is telling you that your cash needed at closing will be
Cash From/To Borrower = $2,167.13
and that seems to make sense.

As Pfhtex is saying everything is dynamic and things will change somewhat but their estimate should be close. Does their estimate of prepaids include a year of homeowner’s insurance?.

Your lender is going to move all of this credit
“credit at closing for the property taxes from January 1st through the day of closing (September 16th).”
into your taxes and insurance escrow account - assuming your taxes are paid at the end of the year. Or they may opt to require that the year's tax bill is paid at closing if the bill is available. In any event it will probably not decrease your cash to close.

If they do opt to pay the year's tax bill at closing, it could increase your prepaids slightly.

And you may have a very small deposit? If so, that will decrease your cash to close.
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Old 06-25-2014, 11:50 PM
 
Location: New Orleans, LA
5 posts, read 51,233 times
Reputation: 15
Thanks for the responses! I guess the only thing I was confused about was whether my husband and I were going to come out of pocket with the prepaid items amt ($3411.30) plus the cash from borrower amt ($2167.13). But what it's sounding like to me is that we will just need the $2167.13 at closing. After looking over the paperwork, I noticed these charges that made up the prepaid item amt of $3411.30: flood insurance premium (approximately $600), Lender's origination fee ($750), prorated taxes from the 16th to the end of September ($279.30) discount points ($363.58), 1st month's mortgage Pymt ($1079), 1st month premium of homeowners insurance ($300-$500). Give or take a few bucks. Am I on the right track? After seller's contribution, then the cash from us the borrowers will only be around $2167.13. Let me know if I've got this right!
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Old 06-26-2014, 09:48 AM
 
2,303 posts, read 2,311,830 times
Reputation: 3834
At closing, you're paying the seller for a bunch of things he already paid for. Taxes are paid in advance for example, so if he paid the taxes for January-March and it's the end of february, you need to repay the seller for the month of march.

Sometimes, they will switch the direction around though, in which case the seller will pay you because he's incurred an expense but hasn't paid the bill yet. Let's say that there is a sewer bill paid after the fact based on usage. If he's run up a bill of $25 so far, he may pay you for that because when you get a bill for $75 later, $25 of that will have been because of the previous owner.

Once everything from the buyer and from the seller is netted together, the final line on the form "Cash From/To Borrower = $2,167.13" reflects the amount left to be paid out of pocket. Normally there would be () around one of those or some other way to determine if the 2,167.13 was From or To, but it's pretty much always From Borrower.

The number itself is not absolute as other people have pointed out (in my case a bill was due about a week before closing and that had to be added on to what I owed the seller) but it was relatively minor(about $70 in my case). Ultiamtely though, that line is what you will pay on the day of closing. FYI, make sure you get a cashier's check, personal checks won't cut it, but your attorney should make that clear to you.
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Old 06-26-2014, 10:44 PM
 
Location: New Orleans, LA
5 posts, read 51,233 times
Reputation: 15
Jeo, so you're saying the we will be paying both $3411.30 and $2167.13????
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