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Here is my situation. I hope someone can explain this to me. I made an offer on a house here in MO. The offer was $139,000 plus $4,000 in sellers closing costs and prepaids.
I am going through FHA for my mortgage. My mortgage guy just turned over my file for underwriting approval and I received an automated me mail from him. It stated that the loan amount was for$136,350. It did not have the interest rate locked as of yet. I guess once underwriting is approved then it will lock it. The package we are going for is %4.75 percent with no closing cost.
If I get this loan with no closing cost. What am I going to have to write a check for? Is it $2,650? I've already put down $500 in earnest money. So will the check be $2,150?
If that is the case then the equation looks like this:
136,350 (mortgage) + $2,150 (down payment) + $500 (earnest money) = $139,000.
What happens to the $4,000? What I would like to happen is this.
$136,350 (mortgage) + $500 (earnest money) = $136,850
135000 goes to seller (there net sale price) and 1,685 back to me.
Does it mean that there is no upfront fee, no origination costs, what?
Closing costs consist of a whole lot of pieces, the cost of the loan only being one.
Other costs that might be considered closing costs are title fee, transfer fee, home inspection, appraisal, survey, owner's title insurance, attorney fees, well/septic tests, etc.
Also, it really depends upon how your contract is written. Here, in Georgia, using the standard contract, $4000 in closing assistance means that the seller will pay up to $4000 in closing costs. If closing costs are higher, the buyer is on the hook for them. If closing costs are lower, the seller keeps the difference between the actual costs and the $4000.
Also, it really depends upon how your contract is written. Here, in Georgia, using the standard contract, $4000 in closing assistance means that the seller will pay up to $4000 in closing costs. If closing costs are higher, the buyer is on the hook for them. If closing costs are lower, the seller keeps the difference between the actual costs and the $4000.
This is how we write them here as well. You should have a GFE (Good Faith Estimate) from your lender already. It will say on there what your estimated closing costs are for your loan. If your estimated closings costs are $6,000, then you'd have to write a check for $1,500 at close of escrow assuming that your earnest money gets credited towards your closing costs.
On a FHA loan - you MUST pay 3.5% down. No getting around it. You must have prepaids paid (insurance and taxes). There is a lot we don't know so we can't give you advice, because we have not seen your Good Faith Estimate.
Did you contact your Realtor to have it explained to you? That person will know the variables - we don't.
On a FHA loan - you MUST pay 3.5% down. No getting around it. You must have prepaids paid (insurance and taxes). There is a lot we don't know so we can't give you advice, because we have not seen your Good Faith Estimate.
Did you contact your Realtor to have it explained to you? That person will know the variables - we don't.
This is a good point. Your down payment is different from your closing costs. You are responsible for both and it sounds like your seller has agreed to pay $4,000 of your closing costs. So you will have to pay 3.5% downpayment PLUS whatever you have left on your closing costs.
The best advice would be to consult with your Realtor to clarify what other variables we don't know without representing you. Be sure that once your lender gets you your Good Faith Estimate that he/she sticks to it. Granted, it is an estimate but If they can't do as they say then they need to make up the difference. Good Luck!
Hopefully you're working with a Realtor and they should be walking you through this and all parts of your purchase. You should also be able to ask your lender.
We have a FHA loan and have 3.5% down but we are unsure of any additional costs that will incur. We have asked for consessions. The agent said we will get 3% back at closing, what does that mean. Is the good faith the 3.5% down?
The loan agent and realtor are not communicating, we are relaying info back and forth, is this common? AND The realtor emailed an AS-IS contract for us to sign, but it was not filled out, is this common?
We have a FHA loan and have 3.5% down but we are unsure of any additional costs that will incur. We have asked for consessions. The agent said we will get 3% back at closing, what does that mean. Is the good faith the 3.5% down?
3% back at closing means that you will get 3% of the purchase price from the seller as a credit to offset your closing costs.
By "good faith" do mean earnest deposit? An earnest deposit may be applied towards your down payment at closing. It is an upfront deposit to show you are serious and to provide the seller some compensation if you breech the contract.
The loan agent and realtor are not communicating, we are relaying info back and forth, is this common?
No. They should be talking directly to each other.
AND The realtor emailed an AS-IS contract for us to sign, but it was not filled out, is this common?
Don't know your situation, but it's not common. Ask your agent. If still unclear, ask their broker.
See above.
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