closing cost question

[bagged123]

What is the name of your state? CT

Ok, we're building a new house (again) and on the first house we just signed the papers at closing and nothing came out of pocket at the closing table. Now on this house we provided a down payment of 10% and last night I recieved my GFE from my mortgage lender. It was 2 sections that are different. 1) says Closing Fees: $8000 and at the bottom of the document it says 15) Estimated cash to bring at closing: $53,000, so my question is
what does this mean? Do I need to get $53,000 to bring to closing or is the $8000 my actual closing cost that I'll be paying out of pocket? My actual mortgage is going to be $280,000, so I kind of need to know what to expect

Also, can we use part of the downpayment to pay closing costs or no? The builder does require 10% down prior to building the house.

I did ask my lender this question as well, but he's on vacation for the next 3 weeks, so I kind of need to know what to expect.
thanks

[Ozark_Sophist]

Is the $53,000 about 20% of the cost of the house? $280,000 less $8,000 is $272,000 of which 20% is $54,400.

What type of mortgage did you intend to get? 100% financing?

[bagged123]

Originally Posted by Ozark_Sophist

Is the $53,000 about 20% of the cost of the house? $280,000 less $8,000 is $272,000 of which 20% is $54,500. There might be other costs to account for the $1500.

I think you need to bring the $53--- to the closing.

What type of mortgage did you intend to get? 100% financing?

The house is $320,000 we put down $33,000 so my actual note is $287,000 (I was incorrect with the actual note amount).

So I have may have to come up with another $53,000 bucks for closing cost fees?


What type of mortgage did you intend to get? 100% financing? no. I wish, but no.

[Ozark_Sophist]

Originally Posted by bagged123

The house is $320,000 we put down $33,000 so my actual note is $287,000 (I was incorrect with the actual note amount).

So I have may have to come up with another $53,000 bucks for closing cost fees?


What type of mortgage did you intend to get? 100% financing? no. I wish, but no.

Closing costs are $8,000. The balance is probably the difference between price of the home and the percentage the bank will finance. Others will probably be along to add some more.

[bagged123]

Originally Posted by Ozark_Sophist

Closing costs are $8,000. The balance is probably the difference between price of the home and the percentage the bank will finance. Others will probably be along to add some more.

Ok, so when I go to closing I'll only need the $8,000 and not the $53,000?

[Ozark_Sophist]

Originally Posted by bagged123

Ok, so when I go to closing I'll only need the $8,000 and not the $53,000?

No, I think you need the $53,000. Closing costs are $8000. The balance of $45,000 probably includes the rest of your downpayment on the house (you said you don't have 100% financing) and perhaps a loan origination fee or something. When do you close?

Sorry, I screwed up the math earlier. I was/am confused and now I believe I have confused you more. Check back for other responses while I find my head.

[bagged123]

Originally Posted by Ozark_Sophist

No, I think you need the $53,000. Closing costs are $8000. The balance of $45,000 probably includes the rest of your downpayment on the house (you said you don't have 100% financing) and perhaps a loan origination fee or something. When do you close?

Sorry, I screwed up the math earlier. I was/am confused and now I believe I have confused you more. Check back for other responses while I find my head.

So I will need the 53 grand when I go to closing? Well thats not happening.
I close in October, but we're getting everything lined up with what we need for closing, deliveries, etc. I have 3 little ones and we're currently renting so we just getting everything ready.

Though I wasn't expected to have to come up with $53,000 though.

[lcannister]

I did ask my lender this question as well, but he's on vacation for the next 3 weeks, so I kind of need to know what to expect.

He has a supervisor.

[nextwife]

Downpayment is seperate and aside from closing costs.

When you chose to buy a house at X dollars, and stated you had available X dollars as your downpayment, you were stating you had those dollars to make up the difference between the purchase price and the mortgage amount. The closing costs ARE THEN ALSO NEEDED, TO PAY THE COSTS OF SECURING THE FINANCING (TITLE, APPRAISAL, CREDIT REPORT, LENDER closing fees, etc.) . If you did not have both closing fees and your stated downpayment ampunt available to you, you SHOULD have either bought a less expensive home or somehow made provisions in your offer to purchase for the seller to pay certain of your closing costs.

You are just NOW adding up what dollars will be needed to complete your closing???? Shouldn't that have been reviewed by you BEFORE you entered into an agreement to build this home?

You can't simply redirect downpayment money to the closing costs unless the lender will increase their mortgage amount to make up the difference. Because otherwise you will be short the money needed to pay the seller what you agreed to pay them.

See, on the closing statement, both the loan funds and the buyer downpayment are added in to provide the seller the dollars they need to be paid.

[bagged123]

Originally Posted by nextwife

Downpayment is seperate and aside from closing costs.

When you chose to buy a house at X dollars, and stated you had available X dollars as your downpayment, you were stating you had those dollars to make up the difference between the purchase price and the mortgage amount. The closing costs ARE THEN ALSO NEEDED, TO PAY THE COSTS OF SECURING THE FINANCING (TITLE, APPRAISAL, CREDIT REPORT, LENDER closing fees, etc.) . If you did not have both closing fees and your stated downpayment ampunt available to you, you SHOULD have either bought a less expensive home or somehow made provisions in your offer to purchase for the seller to pay certain of your closing costs.

You are just NOW adding up what dollars will be needed to complete your closing???? Shouldn't that have been reviewed by you BEFORE you entered into an agreement to build this home?

You can't simply redirect downpayment money to the closing costs unless the lender will increase their mortgage amount to make up the difference. Because otherwise you will be short the money needed to pay the seller what you agreed to pay them.

See, on the closing statement, both the loan funds and the buyer downpayment are added in to provide the seller the dollars they need to be paid.

when we built our first house the closing cost were 6500 and that house was 50 grand less then this one and we rolled them into the mortgage and we put no money down. Just because I had the 10% to put down on this one doesn't mean I have the 53,000 for closing cost. I have the 8000 but not the 53,000. When the mortgage broker and myself talked about this process when we sold our other house, he mentioned closing cost were going to be around 11 grand or so, not $53,000.

The house is: $320,000
down payment: $33,000
the mortgage is for: $287,000

and all of the other fees, title ins, appraisals, atty fees, etc, we have covered. So where would the $53,000 come from? When the house is 320,000 but we're only financing 287,000 for it. . . .

[nextwife]

Originally Posted by bagged123

when we built our first house the closing cost were 6500 and that house was 50 grand less then this one and we rolled them into the mortgage and we put no money down. Just because I had the 10% to put down on this one doesn't mean I have the 53,000 for closing cost. I have the 8000 but not the 53,000. When the mortgage broker and myself talked about this process when we sold our other house, he mentioned closing cost were going to be around 11 grand or so, not $53,000.

The house is: $320,000
down payment: $33,000
the mortgage is for: $287,000

and all of the other fees, title ins, appraisals, atty fees, etc, we have covered. So where would the $53,000 come from? When the house is 320,000 but we're only financing 287,000 for it. . . .

Closing costs should NOT be $53,000 on a home of $320,000. In these parts, buyer side closing costs are three thousand to six thousand, INCLUDING tax escrows. Are you paying points? How many?

Contact your lender for a breakdown of the fees.

Typical HUD INCLUDES:

Appraisal
Credit report
Title Loan policy
Perhaps Owners Policy (Seller pays for this in some markets, buyer in others)
PMI (I am presuming you will have PMI as you are financing more than 80%)
Recording fees
Recording taxes, if any
Prepayables
points
Doc prep costs /Lender closing fees
processing fees
Express mail fees

other misc charges, such as table funding fees, loan set-up fees, etc..

But nowhere near $53,000. I'm looking at a closing statement from a closing I did Friday for a $355,000 home. The buyer closing costs on their HUD totaled $5692, and nothing additional wrapped into the mortgage.

[bagged123]

Originally Posted by nextwife

Closing costs should NOT be $53,000 on a home of $320,000. In these parts, buyer side closing costs are three thousand to six thousand, INCLUDING tax escrows. Are you paying points? How many?

Contact your lender for a breakdown of the fees.

Typical HUD INCLUDES:

Appraisal
Credit report
Title Loan policy
Perhaps Owners Policy (Seller pays for this in some markets, buyer in others)
PMI (I am presuming you will have PMI as you are financing more than 80%)
Recording fees
Recording taxes, if any
Prepayables
points
Doc prep costs /Lender closing fees
processing fees
Express mail fees

other misc charges, such as table funding fees, loan set-up fees, etc..

But nowhere near $53,000. I'm looking at a closing statement from a closing I did Friday for a $355,000 home. The buyer closing costs on their HUD totaled $5692, and nothing additional wrapped into the mortgage.

On the GFE, is has all the fees broken down, which are fine. it then has a section:
Est: total closing: 7800.00
then some more fees.
PMI
fire hazard ins, etc
total estimate prepaid expenses: 3787
then after that it has:
total estimate of settlement cost: 11,470

then at the bottom of the GFE it has a section:
L) estimated cash required to bring to closing: 52,000

so what should my actual closing costs be then?

7800, 11,470, or what? this GFE has me confused. I'm only financing $287,000

[bobr]

I'm not a mortgage professional or anything like this, but I just had the whole thing explained to me in plain english, so maybe this will help you. My situation is a 30 yr fixed plan with 5% down and PMI.

Cost of house (the agreed to "list price") + Costs to close (title, points, appraisal etc.) + Prepaid reserves (prepaid interest, county taxes, home owners insurance etc.) = Estimated Funds to Close.

Estimated funds to close - amount that you're actually getting the loan for = Total funds to close.

Example in my case:
$350K house +
Costs to close (I paid some points to get rate down) = $8633 +
Prepaids = $7260
-------------------------
Estimated Funds to Close = 350,000 + 8600 + 7300 = 365,900

In my case, I was putting 5% down $17,500, so loan was for $332,500

Therefore, the bottom line "total funds to close" is 365,900 - 332,500 = $33,400

----------------------

Btw, when I shopped around, I found much more flexibility going to a broker rather than a single source lender. But shopping around was key >> saved $3K in closing costs with the best option.

[nextwife]

Sounds like this is the total of your prepayables, closing fees and your down[payment of $33000.

Call your loan officer and make them review it with you.

[bagged123]

Originally Posted by bobr

I'm not a mortgage professional or anything like this, but I just had the whole thing explained to me in plain english, so maybe this will help you. My situation is a 30 yr fixed plan with 5% down and PMI.

Cost of house (the agreed to "list price") + Costs to close (title, points, appraisal etc.) + Prepaid reserves (prepaid interest, county taxes, home owners insurance etc.) = Estimated Funds to Close.

Estimated funds to close - amount that you're actually getting the loan for = Total funds to close.

Example in my case:
$350K house +
Costs to close (I paid some points to get rate down) = $8633 +
Prepaids = $7260
-------------------------
Estimated Funds to Close = 350,000 + 8600 + 7300 = 365,900

In my case, I was putting 5% down $17,500, so loan was for $332,500

Therefore, the bottom line "total funds to close" is 365,900 - 332,500 = $33,400

----------------------

Btw, when I shopped around, I found much more flexibility going to a broker rather than a single source lender. But shopping around was key >> saved $3K in closing costs with the best option.

OK thanks, I see how my lender came up with his bottom estimated closing cost money.
down payment + actual fees = estimated cash due at closing

yeah I'm going to do some shopping around to see if I can get a better rate and lower my closing cost fees.