Hi everyone..... I make settlement at the end of August and I can see I'm gonna be short by about $2000. I'm already working the second job to get this done (I knew I'd have to do this going in). Due to an unexpected expense, I'm gonna be short. The house is a new construction and the builder won't pay any closing costs. Does anyone know of a place that can get me a short-term (3-6 months) loan for $2K or so? It looks like most personal loans are outta my reach because they seem harder to get with my BK still showing from 1997. I've got some high-dollar items (36" & 61" television) to put up for a secured loan if someone can point me to a company that can overlook the BK. Thanks
As a followup to this question: The realtor is telling me I have to put a full year's taxes in escrow at closing. Isn't it up to the mortgage company to stipulate how much of the first year's taxes go into escrow? I thought the mortgage company set that amount and that it is usually 3-6 months in escrow as opposed to 12 months.
tmitchell The escrow, both taxes and insurance, is setup to make sure that all the required funds are in the escrow account when each item is due. Normally you will be required to show that you have paid a full year's HOI in advance and they will require 2 months premium to be paid into escrow. On the taxes, what is normally done is you will be charged 1 year's taxes minus the number of months left before taxes are due again plus 2 months( for example...taxes are due in October of each year and you are closing in June. You will be charged taxes from October until June..9 months. You will also be charged an additional 2 months premium because your first payment won't be due until August.) However, the seller of the property will be required to rebate to you at closing the property taxes due from (in this example October) their original due date until you close. (Again going to my example, you be be required to pay a total of 11 months property taxes into escrow...the seller will be required to rebate to you 9 months property taxes that they were resposible for...meaning you owe a net 2 months property taxes) I know it sounds complicated, but the bottum line is you should only owe 2 months property taxes at closing. [disclaimer...your state may do things in a diferent manner and you should check with a competant authority in your local area] Hope this helps fla-tan
tmitchell, Ask your lender if they can raise your rate and pay the difference in your closing cost. Usually a 1/4 percent in the rate will equal 1% of the loan amount that you can use to pay toward closing costs. Some lenders will let you do this but some won't. But it doesn't hurt to ask.
Here is some very important info regarding the tax and insurance escrows. Keep in mind, though, that they vary by state. You said it was NEW construction. This can absolutely help you regarding your escrows -- thanks to the federal RESPA act. Yes, you will be required to escrow, on average a year or so worth of tax and insurance reserves. But what most lenders do with new constructing is BASE the monthly escrow amount on the ANTICIPATED tax rate for the NEW house. The problem is, your taxes for the next calendar year are REALLY going to be based on the assessed value of the house/property AS IT WAS LAST ASSESSED -- which in the case of new construction, is usually a non-homestead rate based on the EMPTY LOT ONLY. Bottom line, you should only have to escrow 500 or 600 bucks for your tax reserves at closing (i.e., $250k home, 20 mil tax rate). Of course, this is all relative to when the home and/or property was last assessed, what the state of the construction process was in on that date and what date you are closing on. Basically, whatever taxes you are expecting to pay in the next 12 months will be escrowed. If you next two tax bills are going to be based on the tax rate of the empty lot, then that is all you should have to escrow. Read up on the RESPA act -- it stopped lenders from making borrowers escrow thousands of dollars in tax reserves when the next 12 months worth of taxes were only going to be a few hundred bucks because of when the property was last assessed and what was on the property. Lenders can't ask you to escrow money that is NOT going to be paid out for taxes or insurance in the next 12 months. RESPA stopped them from earning interest on YOUR money.
