FHA Closing costs

[shadokeeper]

So we made loan app for our FHA loan for our house and we have been approved, but our Loan guy is saying it is to late to include closing costs in the loan, he says that the closing costs would have needed to be added to the cost of the home on the purchase agreement. This does not sound rite to me. FHA allows you to finance your closing costs! I am worried this guy has financed closing costs and is going to tell us to pay them as well... What do you guys think?

[1time2many]

I think you need a new guy as this info should have been disclosed upon approval.

FHA cost are a little steep but i think it is the better loan out there minus a VA if you are a Vet with a disability.

[looksbothways]

FHA does not allow you to wrap your closing costs into the mortgage directly. What they allow is that the seller pays costs/prepays, which you would stipulate in the offer you make to the seller. It is not done at the closing table and the lender does not cover it.

For instance, I paid $92150 for my house and asked the seller to pay up to $4,500 in closing costs and prepays. That was in my original offer (well, after some haggling) My closing costs/prepays came out of the seller's money, so it was financed from my side as a part of the mortgage but the lender isn't paying those costs directly. From the lender's standpoint, I paid $92150 for the house and the seller paid the closing costs/prepays out of their cut of the money.

If you put an offer on the house and did not ask the seller to cover closing costs/prepays, you will have to cover them yourself.

[DEANNATX]

I know with my FHA loan that all closing costs, appraisal cost, and the 3% downpayment were included in my final loan. Only thing I paid up front was $500 earnest money to my seller. All of this was done through a gift program. Before the loan even closed though, my broker presented me with a very long sheet of costs and had me sign it. I'm thinking this is now a requirement. I think I read that somewhere pretty recently.

[shadokeeper]

ok i got it thanks guys, so the lender was not blowing smoke up my bum. When he said the seller would have to pay them and it would be in the purchase agreement. To which it was not part of so it is our responsibility to pay. I was so Pi$$ed off at the lender and My partner, I am now mad at our Realtor for not informing us that if we want to "finance" our closing costs we need to say that in our proposal... If i am understanding correctly... Thnaks again guys :)

[Denita]

OP, if you have not yet had the appraisal, you can add the cc costs into the price now (if you want to do that), but you would have to modify the contract. Of course, the seller would need to cooperate. If the appraisal is finished, it's too late to do it.


DeannaTX, those third party gift programs were stopped last year for FHA.
As to the long sheet of costs - that has been an FHA requirement for many, many YEARS - at least the last 15+ (hard to remember that far back!):shock:

Believe it or not, the costs vary tremendously from lender to lender, even in the same area. So make sure your loan officer provides a detailed accurate good faith estimate right up front and tell them you are going to check it against the closing statement for accuracy (some of the loan officers 'fudge' the numbers by low balling the third party charges and claiming they had no way to know what they were going to be!).

[DEANNATX]

Oh okay now I remember where I read that at.

From the RESPA website when researching for another thread:
http://www.hud.gov/offices/hsg/sfh/res/respa_hm.cfm


HUD will require, for the first time ever, that lenders and mortgage brokers provide consumers with a standard Good Faith Estimate (GFE) (http://www.hud.gov/utilities/intercept.cfm?/offices/hsg/sfh/res/gfestimate.pdf) that clearly discloses key loan terms and closing costs. HUD estimates its new regulation will save consumers nearly $700 at the closing table.

[dazedandconfusedincali]

Actually, there are gift programs. Just not the ones you are thinking of. You can get a monetary gift from a Church, parent, sibling, etc. I just closed this week and I had a gift of $4000.00 from my parents. I just had to have them sign a paper saying it was a gift, and I didn't have to pay it back.

[amortgageman]

ok i got it thanks guys, so the lender was not blowing smoke up my bum. When he said the seller would have to pay them and it would be in the purchase agreement. To which it was not part of so it is our responsibility to pay. I was so Pi$$ed off at the lender and My partner, I am now mad at our Realtor for not informing us that if we want to "finance" our closing costs we need to say that in our proposal... If i am understanding correctly... Thnaks again guys :)

Your loan officer had already submitted your application and received an approval. An FHA loan has a case number assigned to it, and the rate has probably been locked for 30 days.

However, a lender may pay most closing costs by adjusting the interest rate and using yield spreads to cover the closing costs.

Upfront Mortgage Insurance may be financed, and adds to the mortgage.

And, yes, you can still have the seller pay most closing costs (excluding prepaid items, i.e. taxes and insurance), but as a previous poster indicated, this must be part of the purchase agreement.

[Slow Eddie]

I don't know how you got this deep into the deal without being clear on what was happening. Somewhere along the way either yourself, your broker, or your realtor had to ask about closing costs. Somewhere along the way you should have gotten a GFE telling you how much your closing costs would be on a home that costs X amount of dollars and it should have been clear how much you need to bring to the table at closing.

Also, when you submitted your offer on the home you should have asked for %4 back to cover closing costs. If you didn't do it then, good luck getting them to go for it now, since you'll be offering them %4 less then what they agreed to take for the property.

I would fire the broker and the realtor and start over.

Eddie

[shadokeeper]

We are deep! We close in 14 days, we have already had loan approval, and appraisal.
Ok i have a question, we were told that we should not open any new credit lines during this period before closing... Is this true and if it is true when is it ok to get the credit. We need furniture and we want to finance half of it. Should we go the day we close lol and apply for credit, because i have also heard if the house TL showes up it could inhibit our credit worthyness lol... So my plan is to go tto the furnature sotre rite after we close... Does this sound good? I will be sure to read all the fine print in the financing agreement...

[morrow]

We are deep! We close in 14 days, we have already had loan approval, and appraisal.
Ok i have a question, we were told that we should not open any new credit lines during this period before closing... Is this true and if it is true when is it ok to get the credit. We need furniture and we want to finance half of it. Should we go the day we close lol and apply for credit, because i have also heard if the house TL showes up it could inhibit our credit worthyness lol... So my plan is to go tto the furnature sotre rite after we close... Does this sound good? I will be sure to read all the fine print in the financing agreement...

I would'nt do ANYTHING until you are completley done with the transaction and the loan has funded, just to be on the safe side. ;)

Why take the chance?

[shadokeeper]

What does that mean lol? When does that happen when is the loan funded? Does it occur after closing before we get our keys? Or does it happen after we get out keys?

[morrow]

What does that mean lol? When does that happen when is the loan funded? Does it occur after closing before we get our keys? Or does it happen after we get out keys?

It means that the funds have been dispersed. Usually a day after you sign/close. Your title co/agent/loan officer should keep you informed and give you confirmation when it funds.

Its different for refinance transactions, in that there is a 3 day recission period giving the borrower time to change their mind.

This does not apply to purchase transactions or investment properties.

[jq26]

Hey, do what most firsttime homebuyers do. In 2005, for 8 weeks into my new house, I had two beach chairs, a cooler (full of beer), a TV, and a mattress.

It builds character. And certainly makes you appreciative of the simple things in life. :p

[shadokeeper]

We did that for a while when we first moved into our apartment we had bean bag chairs and out for furniture lol. We have most of the furniture. We are only looking to buy a Couch and a Bed room set... we have every thing else.

[jq26]

I suggest just waiting for the loan to fund. I doubt the mortgage will show on your reports for at least a few weeks. I don't think mine showed for well over a month.

[Slow Eddie]

Yeah it takes a while for the mortgage to show on your credit, and it will hurt your score by bringing down your over all age of accounts. I think your safe to apply after you close, since any new accounts will take at least a few weeks to begin reporting.

Eddie

[shadokeeper]

Ok thanks alot guys!

[shadokeeper]

Ok so here is an update on our home purchase, so we close next Thursday in the morning. We start paying interest that day; well our realtor says she will not give up the keys until the next day I am tempted to send her a bill for the one day of interest that we have to pay with out living in the house because she will not turn the keys over until the day after. I am really just so disappointed in the Realtors involvement I am being picky an a$$

[DEANNATX]

I've only bought one home so I'm no expert, but I received my keys at closing. I thought that was generally how it was done. :confused:

[shadokeeper]

I've only bought one home so I'm no expert, but I received my keys at closing. I thought that was generally how it was done. :confused:

Me to

[DEANNATX]

Me to

Did your realtor give you a reason for doing this Shadow? I've heard of people writing something like that into contracts, like they will need more time after closing, etc. But if nothing is in the contract it seems odd to me. :confused:

[shadokeeper]

Did you realtor give you a reason for doing this Shadow? I've heard of people writing something like that into contracts, like they will need more time after closing, etc. But if nothing is in the contract it seems odd to me. :confused:
LOL She is a nut ball! If we were not so far into it i would crap can her and start over with out a realtor. Our mortgage guy does not understand why she is waiting till the day after, closing. The only think i can think of is something i read about, the deed going to the city for processing for it to be all official? "recording the deed" the artical says it should be completed by the escrow company on the day of closing. perhaps she does not realize we are closing in the AM lol!

[looksbothways]

I think some states require that the deed is fully recorded before the buyer can take possession.

I wish I could remember which state in particular, but I just saw one of those shows on HGTV the other day that was done in a state that requires it, as they did not get their keys at close and the announcer explained that the deed had to fully record before they could hand over the keys.

[DEANNATX]

http://answers.yahoo.com/question/index?qid=20060810152718AAkCp22

Check this out Shadow. Lookbothways was right. Sucks man.... :roll:

[shadokeeper]

Ohio seems to be a "wet" state, i was under the understanding that the sellers would get there funding on the closing date. So I want my darn keys on closing lol. See we have already met with the loan guy and signed all of the papers, all we have to do is give him our Bank check for the Down payment and closing costs and we take posession. The loan officer told us he does nto use any formal process, we met with him and the escrow company and signed everything last week; he told us that we just need to have closing costs and down payment to him on or before the 26th...

Kudos to you guys as usual this site is a plethera of information :)

[DEANNATX]

Didn't you say in another thread that the realtor is representing both you and the seller or something like that? I'd say she's more in the seller's corner, if ya know what I mean.

[shadokeeper]

Well we signed buyers Agency with her sating that she is representing the Buyer. We are buying FSBO once that came to be her focus seemed to change from us to them cause they are paying her...

[lilley]

As a realtor, I don't understand why she is holding the keys. I know that in the state of Delaware that the buyer takes possession once the deed has been recorded. Right after closing the attorney takes the paperwork to the courthouse to be recorded and processed in 24 hours. If you don't understand, you have every right to call her broker. If you are not happy, please tell her what your expectations and opinions are of her for not meeting all of your needs on your behalf. All agents are not like that. Please don't think that also.

[shadokeeper]

This ladie is one of a kind, she has given us nothing but greif since we our offer was accepted, i feel she did not earn her comission. She has done nothing we contacted the title agency, we found the house. The only thing she has done is contact the sellers with our questions and she did not do what we asked of her then either. So we started dealing witht he sellers directly via email, i have a plan to contact her broker and talk to him about all of this...

[morrow]

In my experience, we were not given the keys until it was recorded as well.

We had signed docs and then had to wait a few days. I believe our realtor went ahead and gave us the keys anyway but told us she would let us know when it was recorded.

I will never forget that day. It was a Friday, we had taken the day off work expecting to move that day. We had the trucks loaded up and were just basically sitting around waiting for a phone call.

I don't think Ive ever been so impatient in my life, calling the realtor/title co/recorders office, every 20 minutes or so. :oops:

We had actually stopped by the new house and found that the front door was unlocked...it was VERY tempting to just move everything in anyway.

We finally got the okay...the realtor seemed almost elated to be able to get me off her back.

It was frustrating, exciting, nerve racking...everything. Luckily I dont have any plans to go through it again anytime soon. ;)

[shadokeeper]

The realtor just emailed me finaly she said we would get the Keys by 6:00pm on the day the title transfers... Not sure what that means...

[looksbothways]

I just closed on a house in Ohio. I got the keys at the closing table.

It sounds like you're doing things a bit non-standard, though, in that you say you already signed all the paperwork but haven't handed over any money for closing costs or downpayment, like you did a dry close with no money changing hands. Possession absolutely can not transfer until the loan is funded, which can't happen until you hand over the down payment and closing costs.

[shadokeeper]

Well my friend the realtor informs us that we can not take posession of the home untill the title transfers at city hall... the day after closing, I am jsut going to resign to the fact that out realtor is a douch and a real C U next Tuesday! I agree we should get the keys at closing! Why does she have the keys any how?

[morrow]

Why does she have the keys any how?


Because she is the KEY MASTER!! Bwahahahahaha. :twisted:

Sorry. :?

[shadokeeper]

yeah yeah lol, she is an old lady she can't put up that much of a fight lol

[shadokeeper]

Possession absolutely can not transfer until the loan is funded, which can't happen until you hand over the down payment and closing costs.
So we sent the funds for down payment and closing costs on Monday the 23rd we called today to see that status and the title company says the loan has not funded yet... and the title will not transfer untill tomorrow. I am gonna puke... I am getting all "freaked"out lol

[morrow]

So we sent the funds for down payment and closing costs on Monday the 23rd we called today to see that status and the title company says the loan has not funded yet... and the title will not transfer untill tomorrow. I am gonna puke... I am getting all "freaked"out lol


Im assuming you are done throwing up and now in your new home? :)

[shadokeeper]

OMG yes we are all moved in! Still unpacking some things but we are getting settled, I can finally relax! Untill the billd start rolling in lol... Thank you all for all of your help, and support!

[dazedandconfusedincali]

I think everyone has the same feelings as shadokeeper. I know I did. I did not get my keys until they recorded the deed in my name. My realtor put the key under the rock in the front yard, and said to wait til she called me. My loan officer said go ahead and move in anyways, shes going to be calling you in a few hours anyways. So I did, we are all impatient because we have waited years to get to this point.

[Denita]

I think everyone has the same feelings as shadokeeper. I know I did. I did not get my keys until they recorded the deed in my name. My realtor put the key under the rock in the front yard, and said to wait til she called me. My loan officer said go ahead and move in anyways, shes going to be calling you in a few hours anyways. So I did, we are all impatient because we have waited years to get to this point.

This is directly dependant upon in which state you are closing. In Florida we are a "table funding state" which means the funds and the keys are exchanged at the closing table. If you do not have the funds, you do not close. Its a much more civilized way to close IMO. :mrgreen:

[jq26]

That is state specific. In PA, you do a walk-through hours or minutes before closing to make sure fixtures were not removed, that the place is "broom-clean", and that you did not miss any serious defects. Then you transfer money, title, and keys at closing. You then have full ownership rights to the property immediately.

[dazedandconfusedincali]

Yeah here in California, they do the funding, then when that goes through they go to record, then you can get the keys. Which is usually the day after, in my case funding came through on Friday, went to recording on Monday, received keys on Tuesday. Took Forever!

[jetscarbie]

In Ohio when I closed......my broker and realtor was there with the sellers. My broker handed the sellers a check for the full amount....and I was handed the keys. My house was already empty so I was able to move in that day.

It was the best feeling in the whole world. Almost 2 yrs later, I still get chills when I look around thinking "this is all mine"

Almost as awesome....the sellers left me a beautiful crystal bowl with a huge welcome note laying on the kitchen counter with some flowers. (they are our next door neighbors)

shadokeeper. congrats on the home.