Suicidesal5, Home Buyer in 70116

I am approved for a small amount of money for home, 60,000. My mortagage lady quoted me 5 percent for closing costs but now she says that 5 percent

Asked by Suicidesal5, 70116 Thu Apr 15, 2010

doesn't apply because it's such a small loan. Is she lying to me? Also she says I can not roll my closing costs into my loan but I can ask the seller to cover 3 percent of it. I feel like I'm being screwed please help clarify.

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FSBOsuccess, Home Seller, 28590
Thu Apr 15, 2010
I am hoping your "mortgage lady" is either a mortgage broker or lender. She should give you a Good Faith Estimate of your closing costs which normally run 2-3% of the mortgage. If the home appraises for its full value, you don't have enough extra room in the mortgage for your closing costs.

You can ask the seller to cover closing costs, but they don't have to agree to it.
1 vote
David Wagner, , New Orleans, LA
Sun Aug 19, 2012
I just saw this post. The Orleans Parish soft second will allow up to $10,000 toward closing costs and prepaids along with the soft second subsidy.

Normally, an FHA loan allows up to six percent closing costs and prepaids paid by the seller and a conventional allows up to three percent. Both of these are based on the lowest amount down payment required.

I saw that someone also mentioned HUD REOs limit it to three percent. This is also normally the case.

If you need more information, let me know!

David P Wagner, MURP
NMLS# 129994
Affiliated Bank Mortgage
(504) 656-6870
0 votes
Abraham Walk…, Agent, Alexandria, VA
Fri Apr 16, 2010
If I was you (& i'm not) I would wait. The Finance Authority of New Orleans is about to release a another soft 2nd program giving eligible home buyer up to $65,000 in soft 2nd fund and closing cost assistance. You would be able to double your buying power in 2 - 3 months.

But to answer your question...
Your mortgage maybe telling the truth if you are looking at foreclosed properties. HUD owned properties only allow up to 3% in closing cost assistance.
Good luck and happy house hunting.
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Yangsook Ku, Agent, Duluth, GA
Thu Apr 15, 2010
there are some fees flat rather % of loan amount.
Therefore total % get higher than 2-3.5% range due to size of loan.
If you are getting FHA loan, you can ask seller upto 6%, and now I was told by lender that FHA may change this amount contribute by seller, beacuse they don't want to over blow the purchase price.
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Valerie Lee, Agent, Greenville, SC
Thu Apr 15, 2010
It is hard to answer without all of the facts. But she is partly right in that you cannot count on closing costs being covered in the ususal 2 -3 % range (as someone suggested) when you have such a small loan. If you do the math, 3% of a $60,000 loan is only $1800 and will not normally cover everything involved. On a loan of that size, you should ask for 6% from the seller to be sure you will get everything covered - your actual costs AND your prepaids (homeowners insur, escrow, etc.) And even then you could be short. On an FHA loan the seller can pay up to 6% so hopefully that is the route you are taking. If not, you may want to look into doing an FHA loan on this small a loan. Hopefully I have covered it for you. Good luck!
0 votes
Shelia Hanki…, Agent, Chapel Hill, NC
Thu Apr 15, 2010
The best thing to do is get a second opinion. I have a highly trusted loan officer that I use all the time. Feel free to contact him. Chris Walker, Integrity Mtg. 919-636-4862.
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