Shayna, closing costs and down payments are two totally different things. Closing costs run around 3% of the sales price and can be negotiated with the seller to pay some if not all...down payments are different. You can no longer have seller assisted down payments. FHA loans require 3.5% of the sales price. There are very few 100% loans available anymore. You should qualify for the tax credit if it closes on or brfore November 30th....good luck!

2007 study broke it down line by line. I wish they had done so for 2009. Still digging. But thank you again for the info!

http://www.bankrate.com/finance/mortgages/state-by-state-clo…

Hi Shayna,

I am just checking on you this evening. Did you get in contact with your lender today?

Hi Angela,

Chicago Tribune Sunday Sept. 13, 2009 Money & Real Estate section.

Mary Umberger article on a study done by Bankrate.com

Highest closing costs Texas Numero Uno

Lowest Nevada By the way Illinois was 43rd lowest on the list. Yeah Illinois!!

My bad. Average borrower in Texas closing fees $3855 ouch!! compared to Nevada $2276

I would be interested to know why that is Patrick. I do believe they are high here. I can't imagine what closing fees exist here that do not other places. Attorney Review? only about $275.

I have closed transaction as a Mortgage Banker in Colorado and as a Realtor in Texas. I have seen the costs increase dramatically over the last few years.

Was that a recent article? I would like to read it.

Shayna-how are things moving along?

Hi Shayna,

Just an FYI. The Chicago Tribune happened to run a story about closing costs around the country. While Texas did come in as the highest in the county, the average closing costs were around $3500. So again I would have to say that $9000 for closing costs on a $155,000 home seems a little out of line. Are you sure the $9000 doesn't include your downpayment?

I would definately like to hear the rest. I am experienced, and everyone I work with is also experienced? What price home are you looking at? On an FHA, you must put down 3.5%. An experienced realtor tries to get Seller to pay as much closing as possible. If I am not mistaken, we cannot ask for more than 6%?
If you would like to call (972) 757-4527 or email me at Barbara@powerteamtexas.com
I started selling Real Estate in 1984 in New York. Lender's I reccomend are also experienced!
Today is Monday. Did you get to talk to someone in the bank?

Shayna, there is much information coming across, and it's hard to tell what is going on without seeing the figures for myself. You have options, you ALWAYS have options to help achieve your goals.

Patrick and the others are right. Your first step is getting a Good Faith Estiate from your lender. That will itemize the charges by your bank and will also give you a fairly accurate picture as to what your total closing costs would be.

You may consider an FHA loan, or if buying in a more rural area, a USDA Loan. The FHA Loan only requires 3.5% down payment. USDA is one of the remaining Zero down payment programs. I am not "touting" either of these programs as an answer to your dilemma. But only offering options that may be available to you.

Your closing costs, if including downpayment, may be about right. If it is in addition to your down payment, sounds way off. Please TALK to you lender tomorrow. Get the answers you need to understand what your position is. If you do not get answers, don't panic. There are mortgage brokers who want your business enough to find the program that best fits your goals and will explain your options.

Please check back in and let us know how you're doing!

Best wishes for a successful purchase!

Shayna,

You mentioned that you had the down payment (5%) but not the extra grand to pay for closing costs but mention you need $9,000 in closing costs so I'm assuming that you were working with a lender that was able to use the tax credit towards your closing costs and are now wondering if you qualify for the credit. I'm not a tax expert but i don't see where the type of loan you are using (conventional, you mentioned) has anything to do with the tax credit. People pay cash and get the tax credit...

You are supposed to be given a good faith estimate to sign within a certain period of your lock. I really don't know what you have going on there but i'll agree with the other posters that $9,000 in closing costs on a $155k loan is wack. Now,if your down payment was $7, 750 and you put down $1,000 earnest money (which goes towards your closing costs and prepaids) and you thought you needed an additional $1,250 to close but are now being told you need $2,250 to close..that would make sense. With a $155,000 purchase and a 5% down payment, i can see being charged $3,350 in closing costs and prepaids but and addition $8k? I just had someone get a 4.875 rate with less than one point. I imagine there are plenty of lenders with competitive rates out there. Maybe your agent doesn't understand that you are not getting a good understanding since even your posts here seem confusing ;). Good luck.

Shayna,

Unfortunately, the sad fact is that Realtors have only a passing understanding of how financing actually works.

While Realtors do receive training on it and have to pass with 70% knowledge to be licensed, they are not intimate enough with the goings-on and the terminology to help you understand. I can tell you that because I am a Realtor.

The other bit of sad news is that bank loan officers are not licensed (usually) and while they are the ones to explain the process (not the Realtor), they often can't explain it because they were never formally trained. I know this because I am also a loan officer.

So, it is not surprising that your Realtor didn't sit down and explain the process and the same comment about the bank loan officer explaining the timeline and costs.
Wouldn't it be great if just one person could explain everything and then answer your questions about any aspect of real estate? They would be your best buddy.

Most of us are not expert except in some small area, so it takes a team of people to find a house, negotiate for it, inspect it, get it financed and get the deal closed, because we can't be expert in all aspects of a deal, especially where the law is concerned.

So, your first lesson was probably what the Good Faith Estimate is telling you. Based on the contract it should be showing you how much you will borrow and how much cash you need to bring to the closing table. It also tells you how much your monthly payments will be. All of this is an estimate until you get the actual costs for insurance, taxes, inspections, fees and so on.

Your second lesson was probably that different loan programs exist and have different interest rates, closing costs and down payments. Your loan officers should have educated you on these, but most bank loan officers have trouble comparing products because they have only their bank's products to offer.

A mortgage broker has an advantage in that he can show you products from various lenders, including banks. They're like an independent insurance agent selling policies from multiple carriers. By the way, you'll need to get your insurance lined up pretty soon, too. You wouldn't go to just one insurance office, would you? Compare prices and get your friends to offer their opinion of the service and coverages.

It won't hurt you to talk to another lender to find out what's out there. Other loan types may be more appropriate. A locked interest that's above market is a problem. Many lenders, including banks, will let you float it down either to the current rate or some value in between, at least once. Most will let you do that only once, though.

Can a higher interest rate be used to reduce cash at closing? Sure, you bet. The lender can issue you a lender credit back at closing by changing the interest rate. Is that wise? Maybe. The premiums (amount of credit back) are not logical. A 1/4% increase can yield a couple hundred dollars, while a 1/2% change yields over a thousand, or a 5/8% increase can yield less than a 1/2%. It is probably not your best source of cash to close.

Some lenders are offering to loan you the tax credit temporarily until you receive it (next year) and you can use that for down payment. You have to ask if your lender will do that. The tax credit comes off your taxes when you file them, normally.

As to your $155k house, the 5% down is only $7,750. Typically you put $1,000 in earnest money in escrow so you need another $6,750 to cover the down payment. In addition, the prepaids and closing costs will need you to bring more cash at closing, not to mention the home inspection and possibly appraisal.
Prepaids would be for your homeowner's insurance (my guess about $1200 but could be less if you take a larger deductible), and the taxes. Since your closing is in October, the 2009 tax bill will be out, meaning it has to be paid at closing. The seller pays for his portion of taxes up to the closing date and you pay for the proportion until the end of 2009. This happens only in October and later. The tax bill isn't actually due until January.
Normally, two months of taxes would be collected for your escrow account. So, my guess is you'll be paying another $800 for taxes. Plus you must populate your escrow account with 2 months of payments. The escrow account will pay your taxes and insurance next year.
Closing costs include the lender fees and the title company charges, and run into the thousands.

Since you have already negotiated a sale price with the seller, it is unlikely that you can go back and ask for closing costs, unless you basically offer him a dollar for dollar increase in the price. Then the problem might be that the appraisal comes in too low to sell you the house for that price. Do you have any idea what the house will appraise for?

Shayna,

You should have received a Good Faith Estimate from your lender which explains all the costs in detail. If you did not receive one, I would ask for one. Maybe someone from Texas can answer this better, but to me $9000 in closing costs for the buyer on a $155,000 purchase seems quite a bit high to me. I would get the Good Faith Estimate and have someone else take a look at it to see where the costs are coming from.

Shayna...I see a few others touched on this, but you really should have had some idea of your costs based on the truth and lending statement the bank is required to provide. In addition if $9,000 is 5% down I assume you are purchasing a $180,000 property, I don't know what the traditional closing costs are in Texas- but $9,000 in closing cost seems steep to me. I would check with another lender (or your attorney) to see if these numbers are in line.
Steve Loynd- Managing Broker / Alpine Lakes Realty.

Hi Shayna,

Buying a home can be very overwhelming and frustrating. You should not have to worry about all of these things and the terms should have been clear up front.

It is customary to ask the Seller to pay your closing costs. We always ask the Seller to pay closing costs if we know that our buyers need help with that, and we look at our buyers good faith estimate from their lender before making an offer on a property, so we can make sure the buyer can afford the home and all costs involved.

Your interest rate lock can expire, but I am not sure if you can unlock the rate. Who is your lender? Our lenders work 7 days a week.

Looks like you are not getting the hand holding you need during the process. This is very important to our team in providing our clients with the best customer service.

You should get the tax credit if you close on or before December 1st on a home.

If I can further assist you further, please give me a call or email.

Your real estate resource,

Amy Downs, Realtor
Amy Downs & Associates, LLC of'
Keller Williams Realty
972.468.5136 http://www.TeamDowns.com http://www.AmyDowns.com

Hi Shayna,

You need to press your agent and lender for help with this. It's part of the agent's job to have at least a basic understanding of the loan process and advise you on closing costs before you get too far down the road. If you can't get a straight answer you need to speak with your agent's broker. I have several questions about your situation, but the first one is how did you get approved for this loan if you don't have sufficient funds to cover downpayment and closing costs?

If you are able to withdraw from this contract and wish to use another Realtor to continue your home search, you should. If you've signed a buyer's representation agreement with your current agent you'll need to ask for the TAR 1503 form which allows you to terminate this relationship.

If I can help in any other way please let me know. Good luck!!

Best regards,

Andrea Brooks
Keller Williams Plano
469-450-1326

This really depends how far in the process you are. have you already made an offer. If so you may be stuck, if not your Realtor should be able to negotiate closing costs into the contract. A good Realtor is a good start. If you have not signed a buyers rep you are able to look elsewhere for assistance and if you have a good enough grievance you can probably get the buyers rep you have released.

check out my website i do some good things for buyers that helps the stress that comes with buying a home

thanks
RJ

What other areas were you considering besides Allen? I personally specailize in the sales of brand new homes in the Dallas-Ft. Worth area. I worth very hard to negotiate the best deal possible for my buyers. If for any reason you are unable to close on the home, please give me a call! I will make negotiate the sales price of the home & closing costs for you. Some builders do pay all of your closing costs. I also negotiate other things like Free Fridge, W/D, and Blinds.

Please feel free to call or email me if you need any assistance. Again, I am terribly sorry with everything that you are going through. This is suppose to be a happy & joyous moment closing on your new home!

Make it a Blessed Day!



Tamika Turner,
"Your New Home Specialist"
Cell: (972) 697-1178
Fax: (682) 222-1049
Email: Info@NewHomesInDFW.net
http://www.NewHomesInDFW.net
"Specializing in the Sale of Brand New Homes in DFW!"

Hi,
The sale price of the home is $155,000 and the seller is not paying any of the closing cost. I would have to reply to the seller in 25 days( I have 2 more weeks) if the loan cannot be approved and that is the only way my earnest money will be returned. I will have to talk to my bank to get a definitive answer on Monday. Hope everything works out for the better. Thanks again!!

Your welcome! Will the seller help pay towards your closing costs?? That is really your only option. I know for FHA the seller can contribute 6%, I would have to check on conventional. How much is the sales price of the home & how much earnest money will you lose if you can't come up with the money for closing??

Hi Tamika,

No, my RE Agent and LO did not go over anything with me. I'm learning about the loan process from the internet!! I have enough for the 5% down payment, but not another grand to pay for the closing ($9000). I schduled myself to work overtime to earn around $2000 before closing on Oct 23, but that is still not enough. If I do not unlock my rate, then what are other options the bank can offer me. I have excellent credit and I earn a decent income. Will I be denied this loan? If this loan is denied because of insufficient funds, then I would like to get my earnest money back. Thank you for your reply.

Your RE Agent & your LO didn't go over the loan process with you. Wow! I am so sorry to hear that. Your down pymt is 3.5% for FHA & 5% for Conventional. Your closing costs are funds needed to close on your home. Closing costs are approximately 4% of the loan amt. Do not unlock your rate! Paying a slightly higher rate will not make your closing costs less, it will actually make it more. You pay interest on the loan at the time of closing. How much you pay depends on what day you close on your home. Let's say you close on the 15th of the mth, you will pay 15 days of interest (from the 15th-30th). Your interest rate depends on how much interest you pay per day. Even if you did qualify for the tax credit, you using that as a down pymt and/or closing, it would be another $320 liability that the loan officer would add to your debt. They make it seem like you are taking out a loan. I would have to know more of your situation to give you a better response.

Please call or email me at your convenience.

I look forward to hearing from you soon!

Make it a Blessed Day!

Tamika Turner,
"Your New Home Specialist"
Cell: (972) 697-1178
Fax: (682) 222-1049
Email: Info@NewHomesInDFW.net
http://www.NewHomesInDFW.net
"Specializing in the Sale of Brand New Homes in DFW!"