Help! I am soo confused by closing costs,.....

[Anonymous]

Hello everyone

So far in my journey, I have been requested to provide the following prior to closing:

Ok...I got the commitment letter.  The underwriter is requesting the following items:

1. Gift documentation.  -  However, since you are not using the gift, they will need an updated statement showing your current account balance.  Will you have enough funds in your account to close?

I thought I was going to be able to use my pay roll to close on the house, BUT we had an emergency that zapped all money to close, so I have to get a gift. Problem is I cant figure out how much I have to come up with! The loan officers asst. said I need $4814.00 or more. The toal settlement cost $7462.94 The seller has been requested to pay $ 5297.00 in closing costs.My original loan cost illustration states $3494.94. is what I need to bring to closing. of that amount I have paid $1000 in Earnest, given $470 for the appraisel,  I am thinking the amount I need to come up with is about $2000? I have no idea. Also if the sellers are paying for closing costs then do I have to show proof of funds of closing costs...how does that work? Do the sellers write a letter? I am so confused.

2. Homeowner's Insurance

Do I have to pay for the full year in full and up front? Can I put it on a credit card? Or Can I pay monthly? I recall vaguely my LO stating I can bring an invoice and then they roll back into the closing costs???

3. Discrepancy in the employer's address on the paystub and W2.  Can you provide an explanation (on a letter).  I believe the processor will have to also request from your employer.

This was no problem my company is a DBA doing business As another name ect...

I believe that is it...I will confirm with the process to make sure I have not missed anything.

[Anonymous]

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@Anonymous wrote:

Hello everyone

So far in my journey, I have been requested to provide the following prior to closing:

Ok...I got the commitment letter.  The underwriter is requesting the following items:

1. Gift documentation.  -  However, since you are not using the gift, they will need an updated statement showing your current account balance.  Will you have enough funds in your account to close?

I thought I was going to be able to use my pay roll to close on the house, BUT we had an emergency that zapped all money to close, so I have to get a gift. Problem is I cant figure out how much I have to come up with! The loan officers asst. said I need $4814.00 or more. The toal settlement cost $7462.94 The seller has been requested to pay $ 5297.00 in closing costs.My original loan cost illustration states $3494.94. is what I need to bring to closing. of that amount I have paid $1000 in Earnest, given $470 for the appraisel,  I am thinking the amount I need to come up with is about $2000? I have no idea. Also if the sellers are paying for closing costs then do I have to show proof of funds of closing costs...how does that work? Do the sellers write a letter? I am so confused.

2. Homeowner's Insurance

Do I have to pay for the full year in full and up front? Can I put it on a credit card? Or Can I pay monthly? I recall vaguely my LO stating I can bring an invoice and then they roll back into the closing costs???

3. Discrepancy in the employer's address on the paystub and W2.  Can you provide an explanation (on a letter).  I believe the processor will have to also request from your employer.

This was no problem my company is a DBA doing business As another name ect...

I believe that is it...I will confirm with the process to make sure I have not missed anything.

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I'm no expert, but I'll give my 2cents.

closing cost - should be listed on your "Good Faith Estimate" of how much you need to bring to the table.  It is an estimate, but they are pretty close.

Insurance - did the lender provide a name of an insurance company?  in my case, I just contacted that company - gave them my loan file number and they sent me a quote / a questionaire.  they sent me a confirmation that they have created a binder for me and the home and I forwarded that information to the LO.  I didn't have to pay any money upfront.  Actually, the HUD-1 states that 2months should be paid in the rear and covered at settlement.

Don't have any comments on the other bullets.

good luck..

[Anonymous]

Thank you, that actually made very good sense! I do have a GFE and the cost that it says to bring to closing is where my numbers come closer too. And I will asking the lender to provide the insurance they normally use, I pray I already have a "binder'"  and that amount is close to the GFE.  WHew! panic attack resolved!