Financing in Naperville>Question Details

Katie F, Real Estate Pro in Lake in the Hills, IL

We got a closing cost worksheet from our lender - and the "cash from borrower" is roughly 3k more than she told us it would be.

Asked by Katie F, Lake in the Hills, IL Wed Jan 25, 2012

I recall her teling me that the seller will be giving us a credit at closing for past taxes and that around 2-3k of it will be a "wash". Does this seem accurate? We didn't ask for any seller closing cost concessions whatsoever since we got a good price on the home. We are awaiting a response from her, but just wanted some second opinions.

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The good faith estimate has to be the worse case scenario for the buyer, by law. I go through this with nearly every transaction and it is confusing, but it is the law and lenders need to do it, even though it does confuse. If you note the items on the estimate, it usually has items the seller pays, not the buyer - again worst case scenario. And they can't count the tax proration that should be refunded to you by the seller per your contract. The lender may escrow some of that, but you will get some of it credited to you, especially now that the 1st tax installment hasn't been made in most areas for this year.

The only costs the lender can tell you for sure is the charges they are giving you - look at those because everything else is out of their control.

Your attorney will get a HUD right before closing. But if you are unsure about which costs are really yours and how it will all come out, speak to your Realtor or your attorney. They can give you the straight scoop that the lender can't by law.
2 votes Thank Flag Link Wed Jan 25, 2012
Thanks Kenneth,

I'm sorry that you are angry at some companies business model of offering a rebate to buyers. The agent I used doesn't have a broker's split - so she simply rebated what most agents would give back to their broker, to me.

The fact that you have time to sit on Trulia and respond to people you don't know in the way you do, speaks volumes. You should spend more time worrying about your own business, and less being bitter over the choices others make about who they hire and why. With that attitute and level of customer service, it's no wonder you have only 10 listings - 6 of which are under 100k.

Thanks to all who responded with informative answers! It was much appreciated!
1 vote Thank Flag Link Wed Jan 25, 2012
The taxes will be prorated on the HUD1 closing sheet. You will pay the whole years amount when the tax is due, but the seller will pay you, at closing, for the prorated amount they owned the home. In other words, the whole tax bill is $2000 and due in Sept 2012. You close June 1. There will be a $1000 credit to you at closing and in Sept you will pay $2000 for the years tax. If you close April 1 it would be a $500 credit to you.
1 vote Thank Flag Link Wed Jan 25, 2012
Hi Gobears,
Typically the tax proration that you receive as a credit at closing is not allowable on the Good Faith Estimate. This could be why the cash from closing is a bit more on the worksheet. However, the lender should be able to explain it to you more thoroughly since they put the numbers together.
0 votes Thank Flag Link Wed Jan 25, 2012

I'm not angry. I also don't need to defend my business, although you're incorrect.

I just wouldn't choose to work with you.

Show me a broker whose business model is to give their customers money and I'll show you a broker who won't be in business long.

My clients appreciate my customer service so much they don't ask for money back. They also don't have to ask other professionals questions that aren't being adequately answered by those they've hired.

Best wishes to you, Gobears. You may not like the answer, but at least I put my own name to it.
0 votes Thank Flag Link Wed Jan 25, 2012

I wrote a thoughtful and helpful answer. Then, I deleted it after reading your previous posts looking for brokers who would offer a rebate when representing you in your home purchase. I have no doubt that you've done the same with a lender. I, for one, am done answering your questions. If no one on your "team" seems to be giving you a response, perhaps you should evaluate your position on compensating them for their expertise. Of course, you could ask your attorney, but you probably opted not to hire one.

I'm sympathetic to those who legitimately need assistance with the process of buying a home. It seems to me, "Gobears", that your questions stem from either hiring less competant "professionals" or getting 50% effort for 50% compensation with the balance rebated to you. Either way, you're getting what you've paid for and you'll have to live with the choices you've made. How would your bathroom remodel turn out if you asked the contractor for a rebate? Would your dry cleaning by done on time if you ask him for a rebate? How about your meal and service at a restaurant if you asked for rebate on your tip? I just hope you didn't ask your home inspector for a rebate on your "as/is" home. That could be an expensive lesson I wouldn't wish on anyone.
0 votes Thank Flag Link Wed Jan 25, 2012
This is a great question to bring up. I believe that your Attorney will be the best to confirm that all expenses are right and that your HUD1 is exactly as it should be. This can be very confusing and you want to make sure it is explained correctly.
0 votes Thank Flag Link Wed Jan 25, 2012
Hello, you are right , it is good to get second opinions . I would ask her as to why the cash to close increased? Did she add some fees or did some credits not get posted in the worksheet. The closing costs are very simple to understand. There are three parts to the closing costs, first one is the lender charges , that will include the application , appraisal , underwrting processing fees, some lenders break those up ,some will give you a lump sum , and this is the cost that once they disclose cannot change at all , the second part is the title charges and the closing company charges, and that about $1600-$1800 , depending on the kind of property and if you have one or two mortgages. This will also include the recording charges etc , and this cannot change be more than 10% from once they disclose it to you . The third part is your pre-paid charges , the interest that you will pay at closing for the number of days that are remaining in the month, the amount of money you will put in the escrow account for real estate taxes and insurance, and in Naperville you will also have tax stamps for the buyer , $300/1000 of the purchase price. But there is nothing else that you will be paying . You are right that you will get credit from the seller for unpaid taxes for the last year, so take the last year's bill and add the number of days that the seller has owned the property in 2012, and that will be your tax credit . Please fell free to call me if you have any questions and I will be happy to answer any further questions, the best nubmer to reach me is my cell phone 630-660-6376.
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0 votes Thank Flag Link Wed Jan 25, 2012
Your lender should be able to answer your question. Ask her to spell it out clearly so that you understand it completely. Good Luck.

Marianne Hofmann
Charles Rutenberg Realty
Naperville, IL
0 votes Thank Flag Link Wed Jan 25, 2012
Good Morning, Great Question and yes, your lender will be the best source for this answer. Sometimes it might be a tax credit. It should say on the closing statement where all the money is being allocated to. Good Luck DF
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0 votes Thank Flag Link Wed Jan 25, 2012
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