Out of pkt closing headache

[orange]

I'm a 1st time home buyer but Not happy, getting 1 to many people saying "that's not what I said"
So here is the deal. My lawyer is telling me that I have to pay 6% at closing but I'm trying to get a morgage that will cover most of the closing cost. The propety is selling for $120,000. I have to put $3000 down which puts me at $117,000. I want to get a morgage for $123,000 to cover most of the closing cost. I understand that the property will have to appraise for $123,000 1st in order to get a morgage for $123,000 but my lawyer is saying that it can not be in the contract that I'm getting a morgage for $123,000 after he said it could be done. I have a headache please help. P.S. I have excellent credit & a very high FICO score.

[Roger J]

Sounds like you need to find another attorney.  Preferrably one that knows something about real estate closings.

How are you buying this property?  Is it a private deal between you and the seller, or is there a RE agent involved?  If there is an RE agent, then they should be the one that is working out the kinks here.

What is the 6% cost for at closing, exactly?

Why to you "have to" put $3000 down?

You can put anything in the contract that you want so long as both you and the seller agree, AND the lender agrees to do the loan.

There are probably a number of ways to structure this deal for little to no money out of your pocket, but you'll need to supply some more info first.

Raj

[mcole]

Greetings Orange,

I’m a little confused as to what the $3,000 and the 6% numbers are being based on. Is the $3,000 part of the 6%? Is it in addition to the 6%?

Reagrdless, if you have good credit and a high FICO, you should easily be able to get 100% financing. However, most lenders will not include your closing costs as part of the mortgage on a purchase.

But many will allow 3%-6% of the selling price to be paid by the seller and applied to your closing costs. However, that’s something that would have to be negotiated at the time you make an offer.

If you already have a purchase contract, it may be too late. If not, you could offer a little more, with the seller to pay your closing costs, not to exceed X amount. And you’re right the appraisal would have to support it.

If you’ve already applied for a loan, you should have received a Good Faith Estimate that will give you an idea of what your closing costs will be and what they are for. Take a close look at it, as 6% seems a bit high. But keep in mind, the amount of money you need to close also includes prorated taxes, prorated loan payments, etc., which will fluctuate depending on when you close.

Hope this helps.

 8)

[orange]

Thank you both so much.

This is a private purchase btw the seller and I. No RE to make things crystal clear for me.

I was told that the $3000 is going towards the down payment on the property and does not cover or go towards the closing cost.

The 6% closing cost comes to $7020. Now what does it cover?? I don't know.

I spk to a broker. He said he could get me 100% financing
for whatever the property appraised for.  

Point blank I need to ask a lot more questions. The 1st one being what is the break down of the closing cost.

Again Thank you both,
Orange

[mcole]

Greetings Orange,

As Roger3 said, why do you "have to" put $3000 down? And he’s exactly right in his comment that, as long as you and the seller agree and the lender agrees, you can put anything in the contract you like.

So the question is, who said you “have” to? If you’re getting 100% financing (and you should be able to), there is NO down payment. Yes, there may be closing costs depending on how the deal is structured, but as I mentioned before 6% seems high.

Ask the broker you spoke to for the Good Faith Estimate. It will show the exact breakout of the $7020. In fact, legally you’re supposed to receive a GFE within three days of your loan application being submitted. It’s only an estimate, but it will show where the money is going.

If you want, you could even post those numbers here and let people review them and give you their feedback. You may find you need a different broker and/or attorney.

 8)

[Maciej]

so what you need to do is a sellers concession. Thats where you boost the loan amount to cover the closing costs as long as it appraises for that needed value. Did you have the house appraised already?

[JBJR]

call gmac mortgage, they do over purchase price as long as home appraises correctly.  

[richmortgagebroker]

There are loans for first time home buyers for 103% and 107%.