Hi everyone...... I was just approved for a 95% LTV loan for a $155K home at 30yrs, 7.75% and 2 points. The loan officer just faxed me my "Good Faith Estimate of Settlement Charges". Ouch! - Almost $6600. My question, being new to the process, is - How accurate is this estimate? I'm worried sick that I'll come up short at the closing table in 60 days. I barely have enough to cover the $7800 DP plus these $6600 in closing costs. What are the chances of this being underestimated by more than $1K? I'm happy but also petrified at the same time.
Kinetix, Are you sure about that? On my estimate sheet, it goes down the list of fees, taxes, prepaids, etc. Finally, at the bottom, it lists the Total Cash to Close figure, which are the closing costs + prepaids + downpayment (in my case, it's over $11k, but the builder is contributing $5k towards closing, thank God). wajaba
I have found the GFE to be pretty close. Mine was just about what they esitmated, in fact it was a little under. You will get the final figure tha day before you close. Also it's best to close at the end on the month, less prepaid interest
My lender said I need the DP ($7800) PLUS the closing costs ($6500). The breakdown is actually $6569. I just don't want to find out at closing that it's $8K or something more.
This is soley based on my experience, when I got my loan, the loan officer quoted me what I was approved for then befor final closing all closing cost were added to the final loan amount. I did a refinance for my parents home, and they did the same. It maybe different for other lenders, the person you might ask to comfirm this is Christine over at bayhouse.com she specializes in this area.
TMitchell, you will need this amount at closing. They are usually pretty accurate, but often they will send you one right before closing with the exact figure you will need to bring to the closing. (At least this is what we do.) You can call your attorney a day or two ahead of time and they should be able to give you the exact amount. L
It all depends on your loan, some let you roll your closing costs into, some do not. We had our down payment PLUS our closing costs. If this is the figure you were given then they are NOT rolling it into the loan, not all loan programs do that. But your estimate should be pretty close, my figures were slighty lower at closing, b/c I found a better home owners rate than they had estimated and my real estate taxes were lower than they thought and my closing got pushed back a week, so I saved there even though it drove me nuts.
The fees seem high to me. Many of the fees on the GFE are really nothing but profit to the broker and are negotiable. Doc prep fees, processing fees, etc. are usually pure profit to the broker. If these fees seem high to you negotiate them. Often the broker uses such fees to make up for the $ they are losing by charging fewer points than a competitor. Congratulations on your approval!
Sorry to mislead you tmitchell, it would make sense what they did in my circumstance, as I only borrowed 60% LTV. Didn't take into account that your pretty close to max on your loan.
I think the fees are high b/c the are paying 2 points, that right there is over 3100, plus the other cost seems to be in line??
Thanks Jeff. The biggest chunk of the closing costs is the 2 points ($3K). Since the home isn't built yet, would it be unrealistic to set my closing date to be like the end of June? that gives me more time to get some more cash together just in case. From what I've seen, a closing date that's 60 days or so away isn't outlandish, is it?
On a new build, I wouldn't set the closing date any less than 60 days. It very well could take longer to have the house ready (depends on how fast the builder is)
Is anyone familiar with how much of a deposit you need to put down on a new build before they will begin construction?
$2k for me, due in about 30 days. This is in addition to the $1k earnest money I already paid. wajaba
I paid 1k in earnest money for a new build (I later backed out because the builder/builders realtor broke the contract - they didn't build the house with stuff that was detailed in the contract) I had no other payment due until closing.
Our closings costs were financed as part of the loan and were a lot more than 2 points, that's one of those hard knocks living and learning lessons. You can compare average costs associated with closing here: http://www.bankrate.com/brm/news/mtg/20010621b.asp Sassy
Thanks for the replies. I'm just trying to get a realistic idea of the process before I go looking/sounding like a newbie as I go through the process.
tmitchell, what are your scores? The closing costs (including the 2 points) and at 7.75% sounds high. Interest rates are at a real low again right now. I believe I read that they are at their lowest in 7 weeks. That's almost 2 months! Are you working with a mortgage broker? Different brokers have access to different companies. I would make a few phone calls tomorrow and see give them your credit scenario (Don't allow them to pull your credit. Don't even give anyone your SS#). They should be able to tell you what they can offer you based on what you tell them. Plus, you might find a lender that isn't as strict with their guidelines. You never know. It doesn't take very long to make a few calls. 2 points is a lot to pay and still get a 7.75% interest rate if your scores are decent. It's usually safe to say that your closing costs, minus your down payment, are about 3% of the sales price., which would make them $4,650 on a $155K home. You are paying 2 points on top of that. A point is approx. 1% of the sales price. One usually pays points to buy down their interest rate. Hope this gives you some ideas.
