Home Buying in 11554>Question Details

crisd21, Home Buyer in New York, NY

Are the three months of fees required including in your closing costs?

Asked by crisd21, New York, NY Sun Sep 9, 2012

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Trevor Curran’s answer
Just saw your followup post below about "reserves" required for FHA loans.

Reserves are defined as full PITI mortgage payments verified in the Borrower's bank accounts after accounting for Down Payment and Closing Costs. Requirements for the number of months worth of reserves are determined by the loan program and/or Lender requirement.

In general FHA Guidelines do not require reserves for a Single Family Home purchase. For Conventional (FannieMae/FreddieMac) loans, a minimum of 2 months reserves are required for a similar purchase.

Some Lenders may require reserves on an FHA Loan depending on the overal credit profile of the Borrower according to credit score and debt-to-income ratios.

Trevor Curran
NMLS #40140
Mobile: 516-582-9181
Office: 516-829-2900
Fax: 516-829-2944
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker – NYS Dept. of Financial Services
NMLS#3528
0 votes Thank Flag Link Tue Sep 11, 2012
Good morning crisd21,

First rule of thumb about closing costs: ALL fees associated with the purchase of the home---and financing the purchase with a mortgage loan---are considered "Closing Costs.' Not all Closing Costs are paid at closing, though the bulk of the costs are.

Your Home Inspection fee is a closing cost, even though you pay that in the beginning before you've signed the Contract of Sale. Same with the Appraisal fee which you pay early in the Loan Application process.

I'm not sure exactly what you mean by "three months of fees" but I am guessing you might mean escrow deposits for property taxes and insurance. Your Mortgage Banker should be your guide on this because the amount required for escrow deposits will vary depending on the location of the home you are purchasing and how often property taxes are due and the time of year you are closing relative to when those taxes are due. I am closing a refinance loan this week where the property taxes are due and six months worth of taxes are being "picked up" for payment at closing. The property is located in a County where taxes are paid every six months.

You posted your question in zip code 11554, which is East Meadow in Nassau County. You should expect to pay 6 months taxes at closing for your property tax escrows AND expect to reimburse the Seller of the home for another month or two worth of taxes for property taxes they have already paid. In general in Nassau County purchases I prepare my clients to have 8 months worth of taxes ready for closing. (That reimbursement to the Seller is called an "adjustment" at the closing table and is one of those "hidden" Closing Costs not disclosed to you on a Good Faith Estimate).

I hope that answers your question.

Trevor Curran
NMLS #40140
Mobile: 516-582-9181
Office: 516-829-2900
Fax: 516-829-2944
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker – NYS Dept. of Financial Services
NMLS#3528
0 votes Thank Flag Link Tue Sep 11, 2012
Ok so is there an amount mandatory by an fha lender that has to be held in reserves
0 votes Thank Flag Link Sun Sep 9, 2012
FHA does not require reserves but the lender may require it. To learn more about FHA loans visit http://portal.hud.gov/hudportal/HUD?src=/buying/loans or you can contact a Mortgage Advisor.
Flag Sun Sep 9, 2012
Hey there. I think i get the drift of your question. It is advised that you should have at least 6 months of financial reserves after closing, for emergency reasons. This amount is not included in your closing costs.

I hope this answered your question! If you have any further questions, please feel free to contact me by the ways below.

Wishing you the best of luck,

De Vonte Williamson
Licensed Real Estate Salesperson
Proudly Serving Long Island
Coldwell Banker Residential
Direct:(631)638-6193
Mobile: (631)384-3695
cbmoves.com/DeVonte.Williamson
http://devontesellsny.wordpress.com/
"I Stand Behind Getting You Results!
0 votes Thank Flag Link Sun Sep 9, 2012
Not sure who the question is directed to, nor what is being referred, however you can ask your agent the question...
0 votes Thank Flag Link Sun Sep 9, 2012
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