Buyer1234, Home Buyer in Suffolk County, NY

I'm purchasing a short sale in suffolk county for $179,000. Will be a 30 year FHA fixed rate loan. LO told me to expect around $12k closing

Asked by Buyer1234, Suffolk County, NY Sat Jun 18, 2011

costs?

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Thomas McGiv…, Agent, Farmingville, NY
Sun Jun 26, 2011
one word of advice here - R E L A X.

All is good. All will work out. Deep breaths...
Web Reference:  http://tommcgiveron.com
0 votes
Annette Levi…, , New York, NY
Mon Jun 20, 2011
Did you apply for a mortgage with that LO? If you didn't, find another one. Any time a borrower asks for closing costs, the LO should give it to you on a form called "GFE" or good faith estimate of closing costs. If you have applied for the mortgage (I assume you have since you are closing in July) then the LO's company had 3 business days to send you a GFE. If they didn't, then they went against federal regulations.
I always give my buyers a hand written closing costs statement since I am not legally allowed to put all your closing costs on the GFE. Besides setting up your real estate tax and home owners' insurance escrow, you will be paying the seller for the months that they have payed taxes for that are after closing. Also you will need to have a paid up homeowners' insurance policy before a closing date is set.
If the house has an oil burner, then you will be paying the seller for the oil left in the house. You may need to put a deposit down for electric and water service. Those are changed the date you close so they can do a reading.
If you have signed contracts, didn't your lawyer go over this with you? If you haven't signed contracts (you will not be closing this summer), you lawyer will go over closing costs with you.
0 votes
Shane Milne, Mortgage Broker Or Lender, South Jordan, UT
Sat Jun 18, 2011
Yes if you close in a different month then the # of months for those reserves will be different. It is based on when they are due, and how many months each tax "installment" covers.

I cannot recollect exactly when the tax due dates are for NY (and it could vary depending on the county/area as well since there are school taxes, etc.) but hypothetically let's say they are due in two 6 month installments, you are closing in July, and the next installment is due in December (with the following one being in June, and repeats every year). If you close on July 15th, your 1st payment due date won't be until September 1st (you skip August's payment), and so if 6 months of taxes are due in December, and you make Sept/Oct/Nov payments, that is 3 months you pay, but the lender is 3 months short - so they will need those 3 months to be deposited at closing. In addition, by law, they can also have a 2 month "cushion", so then it would be a total of 5 months of property taxes into the escrow account.

http://portal.hud.gov/hudportal/HUD?src=/program_offices/hou… has a detailed explanation on "How do I figure how much money the lender is allowed to require in my escrow account?"

Hope this has helped.
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Buyer1234, Home Buyer, Suffolk County, NY
Sat Jun 18, 2011
The property taxes are $5,500 annually. Now that you mention that, I recall her explaining that in the conversation we had. As a follow up to that, we spoke about this about 2 months ago, and now we're talking about a closing date sometime next month 7/11. Will that number vary based on which month I actually go to closing? Ex: If her estimate was based off of closing in May, but I dont actually close until July, the closing cost she explained would be decreased by 2 months worth of RE taxes and insurance?
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Shane Milne, Mortgage Broker Or Lender, South Jordan, UT
Sat Jun 18, 2011
That may not be too far off, as property taxes can be very high in NY, and a large portion of the "settlement" costs are derived of your escrow account that you need to put X amount of months of property taxes & insurance into.

How much are the property taxes on the home you are buying? On a recent FHA purchase in Orange County, NY back in April, on a $395k sales price, the annual property taxes were $4,000 + the annual school taxes were $8,000. The buyer was required to put 7 months of property taxes & 6 months of school taxes - that right there was about $6,300 just for taxes into the escrow account. Insurance was pretty cheap, only $400/year, and there was only 3 months of insurance required, so another $90, but with the 1st year of insurance that totals another $490 - so the escrow account/1st year of insurance was $6,800. Property taxes often correspond with the value of the property, so if you are purchasing a $179k sales price in the same area (Middletown, NY), then from that comparison if you were closing in April they'd only have been around $3,400.

But since your property taxes will be calculated differently than on a home in Orange County, NY you should ask your loan officer for a breakdown of how many months of property/school taxes & insurance they are estimating. Those are going to be costs that would be the same no matter what lender you choose.

The attorney fee & title costs were about $1,600, additional owner's title insurance policy was about $1,750 - totaling about $3,350 for those fees. The lender's & owner's title insurance policy are based on the loan amount & purchase price but they won't be "half" of that amount for you, however yours shouldn't be quite that much (I'd estimate roughly 75% of that amount). The closing attorney can be selected by your mortgage lender or you, in NY sometimes mortgage lenders only will allow you to use an attorney off of their list of "approved attorney's". Their fee can vary a little, but most are in the same ballpark. It's good to get a few recommendations and not just go with the first closing attorney you speak to/you are referred to (especially if the seller is recommending them).

Next is the mortgage tax, which I believe in Suffolk County, NY you just have a .8% mortgage tax based on the amount you are financing. So on a $179k sales price, 3.5% down payment, that is a $172,735 loan amount, and the mortgage tax would be approximately $1,381. Recording fees can also be expensive in NY - figure another $350.

Then you have your lender fees, which obviously will vary depending on the lender. So up until the lender fees, you have an estimated cost of around $7,700 or so. If your lender fees are another ~$4k - that would explain the total settlement costs of about $12k.

I am in Orange County, CA, not NY, so do not confuse me with being a local loan officer, but I have done several purchases in NY.
0 votes
Jaishree..Ja…, Agent, Woodbury, NY
Sat Jun 18, 2011
Ask your LO to give you the Good Gaith Estimate in writing, both are right. If you want to speak to any local lender, I will be happy to give you few names, so you can compare. Good Luck
Jane Zilpelwar
jzilpelwar@yahoo.com
Web Reference:  http://www.JaneZilpelwar.com
0 votes
Gregorio Den…, , San Diego, CA
Sat Jun 18, 2011
Did you complete an application? If you completed an application giving all of your information and a property address, you should have received or will be receiving a good Faith Estimate (GFE) within 3 business days of your application that will detail the fees associated with your purchase. Make sure they provide you with one.

No one can tell you if that amount of fees is too much because in order to do that they would have to know your credit score, the rate you are getting, the type of property you are buying, what the property taxes are, what your insurance is, etc. This is not a question someone unfamiliar with the details of your transaction can answer. If you are unsure you are getting a good deal, contact another local loan officer, submit your information and get another quote before you decide who to work with.
Web Reference:  http://WeFixRates.Com
0 votes
Elva Wormley, Mortgage Broker Or Lender, San Jose, CA
Sat Jun 18, 2011
Hi,

You can always ask your loan officer to provide you with an estimated closing statement or fee details worksheet that will show a breakdown of all the fees and charges.

Best regards,

Elva Wormley
Cobalt Financial Corporation
0 votes
Buyer1234, Home Buyer, Suffolk County, NY
Sat Jun 18, 2011
hmm...trying to respond to you but it didn't seem to work last time. Anyway, she did explain the costs over the phone, and said all of them are standard fees etc. That number does not include my down payment of $6300 (3.5%) for a total of about $18,500 at closing. Just seems very high to me based off everything i read. Was wondering if someone local had something to compare it to?
0 votes
Dallas Texas, Agent, Dallas, TN
Sat Jun 18, 2011
Your buyers agent OR LO can detail all costs involved does it include your down payment? and etc?

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
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