We have an offer in on a house in NC and I understand most of the process. But Not This ...

Asked by Janelle Griffith, Matthews, NC Wed May 29, 2013

The asking price is 134,900 and we offered 136,900 and asked the seller for 5000 in closing costs. They countered with 136,900 and 4791.50 in closing costs. We accepted the counter offer so we are under contract with 3.5% down. My question is - what are we financing? The 136,900 or the 132,108.50 minus the down payment?

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Good evening, Janelle:
1 vote Thank Flag Link Wed May 29, 2013
Thank you
Flag Wed May 29, 2013
You are financing the \$136,900 less the 3.5% down payment. You really should be speaking to your buyer broker and if you aren't using one that was a mistake. All you need to do to get started is tosend your lender a copy of the fully executed contract.
1 vote Thank Flag Link Wed May 29, 2013
Thank you - I do understand it now and I do have a buyers agent and broker but I have bugged them so much about everything I figured I'd give them a little break.
Flag Wed May 29, 2013

But doing some quick mortgage math makes it seem that your seller is paying 3.5% in closing costs.

Your base loan amount for FHA = \$132,108.50 and your minimum investment for FHA loan will be 3.5% or \$4791.50; coincidentally the same amount of Closing Costs your seller is paying on your behalf.
1 vote Thank Flag Link Wed May 29, 2013
Thank You
Flag Wed May 29, 2013
You will be financing \$136,900 minus your down payment. You should have received a Good Faith Estimate when you applied for your mortgage which breaks down an estimation of your closing costs. Closing costs will include mortgage fees so you should have a pretty good idea what to expect at the Closing Table.
1 vote Thank Flag Link Wed May 29, 2013
Thank You
Flag Wed May 29, 2013
You should check with your lender, but it seems that your loan amount will be \$132,108.50, based on the purchase price at \$136,900 with a and \$4,791.50 down payment. Best of luck!
1 vote Thank Flag Link Wed May 29, 2013
Thank You
Flag Wed May 29, 2013
Thank you
Flag Wed May 29, 2013
You are financing 132,108.50 -- the sellers are then crediting you 4791.50 toward any closing costs... now you should make sure its for recurring AND non recurring closing costs.. so that you can use as much of the credit as possible. Hope this helps.