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Cpelton, Home Buyer in Rome, NY

Our GFE says we have 6800 in settlement costs and we have 4600 sellers concessions. How much will we pay at closing?

Asked by Cpelton, Rome, NY Wed Sep 21, 2011

Our house purchased at 81, 514. 2800 down payment brought the loan to 79447. We have 4600 sellers concesisons. So how much will we actually pay at closing? Will we pay the 6800 (settlement costs) 2800 (down payment). Or will we take the 4600 from the 6800 and pay 2,200 in closing costs plus down payment??

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If you are trying to calculate your "funds to close", the GFE isn't going to be terribly helpful, as the GFE shows some costs that may be covered by the seller, such as transfer taxes and an owners title insurance policy (which depending on your contract, may be a buyer charge). It also doesn’t show any seller closing cost credit, prorated tax credit, or earnest/initial deposit credits that have already been put into escrow.

The "funds to close" is represented on the “Details of Transaction” (often on) page 4 of the Uniform Residential Loan Application, and should take into consideration all of the previously mentioned items. Your lender may also choose to provide you a more detailed breakdown of all of those costs on an "Itemized Fee Worksheet" of some sort, which will show all of the fees from the GFE shown in the correct "buyer paid" or "seller paid" category, your earnest money deposit, any seller credits, etc... but that is not a requirement.

From the info you can provided, by best guess at your "funds to close" would be the sales price minus your down payment ($2,852.99 or $2,853 rounded up) minus any earnest money you put down (for this example let's say it's $500 you put down, but insert however much you actually put down) ... so that portion would be $2,353 you would owe at closing (down payment minus earnest money deposit). Then let's also say that all $6,800 of costs on the GFE will also be charged to you and then you have the $4,600 seller credit against it, then you would owe $2,200 from that portion. $2,200 + $2,353 = $4,353 due at closing.

However not all of the $6,800 will be charged to you and owed at closing. Part of the $6,800 is the 1% upfront mortgage insurance premium on your FHA loan (which is $786.61), which can be paid out of pocket at closing OR financed into your loan amount, and for your situation it is being financed into your loan amount and that is what brings your base FHA loan amount from $78,661 up to the $79,447 figure.

So we now know that it's not $6,800 of costs from the GFE you need to pay at closing, it's $6,013.39 ($6,800 minus the $786.61) - then $4,600 seller credit against that leaves only $1,213.39 due from you + the $2,353 for the remaining portion of your down payment.

But it may even be different than that, so rather than me trying to piece things together (or you trying to piece them together from the information you have) I really suggest you call up your loan officer and ask for that easy to understand "Itemized Fee Worksheet" which will show the sales price, your new loan amount, the costs you have already paid, the costs you need to still pay, the earnest money deposit you put down (if any), the closing cost credit from the seller, as well as any other costs/charges/credits that are applicable to your specific purchase transaction. That information requires the loan officer/their processor to get information from the closing attorney, but it's still very possible to get.

I explain in greater detail why the GFE you are reviewing won't be what you need to calculate your "funds to close" in the web reference below. It's an explanation of what the GFE is & is not.
1 vote Thank Flag Link Thu Sep 22, 2011
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