U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 09-21-2009, 11:20 AM
 
32 posts, read 124,266 times
Reputation: 24

Advertisements

Afternoon Everyone,


We got approved using my hubby's VA mortgage. He received 100 percent financing with no Downpayment and no PMI insurance. Every time we want to see a property, the Seller is asking us for a Downpayment...The bank didn't require a Downpayment, why does the Seller? Is this like the "Good Faith" Money I've heard about? Also, how much of a down payment should we put? We have limited cash resources and will need about $15-20K for closing costs...We are 1st time homebuyes and just want to be sure of what we're doing..Thank you all so much!!!!!!!!
Rate this post positively Reply With Quote Quick reply to this message

 
Old 09-21-2009, 11:33 AM
 
Location: Plano, Texas
1,675 posts, read 6,807,122 times
Reputation: 697
I think they are referring to earnest money, which is money you put down with the offer. The size of the deposit varies based on purchase price. If buying between $100,000 and $250,000 you should probably put down $500 to $1000.

Your realtor should be able to give you an idea of what you should put down.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-21-2009, 12:00 PM
 
66 posts, read 145,071 times
Reputation: 52
Earnest money, as mentioned, is included with the offer. However, if you are approved for 100% financing of the purchase price of the house, then the earnest money should be applied as a credit at closing (along with other seller contributions, such as pro-rated property taxes, etc), effectively reducing your closing costs.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-21-2009, 12:07 PM
 
Location: Fuquay Varina
6,102 posts, read 8,706,205 times
Reputation: 17192
I just closed on a VA loan in May, and they asked the same thing. I sent 500 as earnest money and recieved that back at closing. I wouldn't give them more than 1000 though if money is tight.

I also had the seller pay ALL of my closing costs, you might want to negotiate that part!
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-21-2009, 04:12 PM
 
Location: Central Texas
20,964 posts, read 42,496,310 times
Reputation: 24654
Agreed that they're not asking for a "down payment", they're asking for earnest money, which the buyer puts down and will get back if they don't default on the contract under one of the conditions by which the seller gets to keep the earnest money if the deal doesn't close.

It needs to be a substantial enough amount that a buyer will not feel inclined to walk on a whim (leaving the seller with having had their house off the market during the period of time it was under contract, for nothing). Here, it's generally at least 1% of the purchase price. If you have 100% financing, you will, indeed, get it back at closing as a credit.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-21-2009, 10:49 PM
 
Location: I think my user name clarifies that.
8,292 posts, read 25,473,162 times
Reputation: 3912
Quote:
Originally Posted by Felicia327 View Post
Afternoon Everyone,


We got approved using my hubby's VA mortgage. He received 100 percent financing with no Downpayment and no PMI insurance. Every time we want to see a property, the Seller is asking us for a Downpayment...The bank didn't require a Downpayment, why does the Seller? Is this like the "Good Faith" Money I've heard about? Also, how much of a down payment should we put? We have limited cash resources and will need about $15-20K for closing costs...We are 1st time homebuyes and just want to be sure of what we're doing..Thank you all so much!!!!!!!!
It's possible that your mortgage company is making the seller cover a lot of the closing costs that he/she otherwise wouldn't have to pay.

It's also possible that this "downpayment" is actually Earnest Money - which is very common.


But mostly, I'm interested in your $15,000 - $20,000 in closing costs. That is a LOT of money for closing costs! Is it a high-end home?
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-22-2009, 09:07 AM
 
Location: Boise, ID
8,047 posts, read 27,222,431 times
Reputation: 9443
Quote:
Originally Posted by Omaha Rocks View Post

But mostly, I'm interested in your $15,000 - $20,000 in closing costs. That is a LOT of money for closing costs! Is it a high-end home?
I wondered about that too. Its either a million dollar range home, which is unlikely for a first time homebuyer with 100% financing, OR they are paying a bunch of points to get their rate down, OR they are wrong on their closing costs.

To the OP, did your lender give you a good faith estimate? That should give you a realistic estimate of your closing costs. I would guess they are no more than 1/4 of what you quoted, and possibly even as low as 1/10th.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-22-2009, 09:08 AM
 
32 posts, read 124,266 times
Reputation: 24
Default Thank you all for the EXCELLENT advice!!!!!!!!

Quote:
Originally Posted by Omaha Rocks View Post
It's possible that your mortgage company is making the seller cover a lot of the closing costs that he/she otherwise wouldn't have to pay.

It's also possible that this "downpayment" is actually Earnest Money - which is very common.


But mostly, I'm interested in your $15,000 - $20,000 in closing costs. That is a LOT of money for closing costs! Is it a high-end home?
We haven't exactly settled on a home yet, we're still looking @ homes. The area's we're looking (Westchester, Rockland and Orange Counties in New York) tend to have higher Taxes, but we're not searching for anything high end, we just want a decent home that meets VA Standards, as well as our own. I thought 15-20K was a lot of money for closing also!!! But we were told to be prepared and just have that much...

How do we get the seller to pay Most or All of the Closing costs? It would be great if we could do that, then we could put a large chunk of cash directly into the Equity of the house.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-22-2009, 09:13 AM
 
32 posts, read 124,266 times
Reputation: 24
Default Good Faith Estimate

Quote:
Originally Posted by Lacerta View Post
I wondered about that too. Its either a million dollar range home, which is unlikely for a first time homebuyer with 100% financing, OR they are paying a bunch of points to get their rate down, OR they are wrong on their closing costs.

To the OP, did your lender give you a good faith estimate? That should give you a realistic estimate of your closing costs. I would guess they are no more than 1/4 of what you quoted, and possibly even as low as 1/10th.

Citibank gave us a Good Faith Estimate of about $12,000.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-22-2009, 09:17 AM
 
Location: I think my user name clarifies that.
8,292 posts, read 25,473,162 times
Reputation: 3912
Quote:
Originally Posted by Felicia327 View Post
We haven't exactly settled on a home yet, we're still looking @ homes. The area's we're looking (Westchester, Rockland and Orange Counties in New York) tend to have higher Taxes, but we're not searching for anything high end, we just want a decent home that meets VA Standards, as well as our own. I thought 15-20K was a lot of money for closing also!!! But we were told to be prepared and just have that much...

How do we get the seller to pay Most or All of the Closing costs? It would be great if we could do that, then we could put a large chunk of cash directly into the Equity of the house.
I wonder if that figure includes escrows - which would be a year's worth of property taxes and insurance?


Also - and take this with a grain of salt - if it were me, I'd run as fast as I could away from anything related to Citibank. If at all possible, go with a local bank.
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages

All times are GMT -6.

© 2005-2022, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top