Rolling more prepaids in?

[Anonymous]

Dumb-O question -- especially since we're only 8 days from projected closing. Please, bear with me!

$ 18,000.00 Down payment
$ 5,896.49 Estimated Closing Costs
$ 7,386.97 Estimated Prepaid Items/Reserves
$ (9,240.00) Seller Credit
$ (3,727.00) Financed PMI/FHA/VA Funding Fee
________ _____________
$ 18,316.46 Total Funds From Borrower

So, my assumptions are this:
The seller credit of $9240 is paying off ALL of the closing costs, leaving behind a positive balance of $3344. The $3344 is then being applied to the Estimated Prepaids, leaving a "negative" balance of $4042. That $4042 is being rolled into the loan, along with the Financed PMI/FHA/VA Funding fee.

So my question is this:
In order to have more cash at the closing table, is it possible, with 8 days left to closing, to modify the loan so we roll more of the Prepaids into the loan itself? Or is it just too d@mned late, if we want to close on the 20th?

The file's passed UW "conditionally" -- we're waiting on the appraisal and waiting for the TSP document to be sent to her.

Or is that so monumentally stupid that I should be tarred, feathered and run out on a rail?

[Anonymous]

Anyone know? Would this be an undue hardship to ask the LO to modify the terms?

If it matters, the appraisal's not until the day after tomorrow. And so far, we've been told that we'll stay well within 92% LtV.

If any of that matters!

Thank you so much!!

[DallasLoanGuy]

ask the loan officer.

but to roll in costs, you would have to amend contract.

time consuming.

i wouldnt be happy about it, but i would try it if i was the loan oficer because i want my clients to be comfortable about their financing.

[Anonymous]

Thanks, Dallas!

Can I ask what contract you mean? We've not signed anything other than our Purchase Agreement -- and it only mentions how much the purchase price is and who much we're putting as down payment.

And actually, the loan's changed a bit since then, and we've never gotten an amended contract. Our contract says that our loan's for $213K, but in the GFE with CW, it's $216,727.

Is that a problem?

Also, I did go ahead and email the LO, but she's slow about getting back to us. The only person who's been quick has been the Loan Processor -- would she able to do anything?

[DallasLoanGuy]

you dont 'roll in costs'

the seller pays them.

if you have an agreement for 100k purchase and them pay 3k..... then you could amend contract to purchase at 102k with 5k paid in seller paids.

make sense?

[Anonymous]

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@DallasLoanGuy wrote:

you dont 'roll in costs'

the seller pays them.

if you have an agreement for 100k purchase and them pay 3k..... then you could amend contract to purchase at 102k with 5k paid in seller paids.

make sense?

---

Not really ... but then, my head's still swimming with everything else I'm trying to understand.

The costs I meant were the prepaids, of which $4K was being rolled into the loan (at least, that's how I understood it). Does that make sense? Or am I even further off than I thought I was?

It just seems like for closing costs, there's an "extra" $3K that's not being used for closing costs and is instead, being used for the prepaids. Is that right?

Also, like I said, the contract is for $213K for a loan, while CW is saying that our loan will be $216,727. Does that difference in number make a difference?

I'm really sorry for being such a stupid pain. I really, really, really am trying to understand!! And I really do thank you for trying to help me understand! Lord knows you do a better job of it than my DH most days!!

[DallasLoanGuy]

up front mortgage insurance premium as added to loan amount. that is why the difference there.

without looking at numbers, i dont know where we are disconnecting here on the costs.

you talk about extra 3k and i get lost.

BUT... if the seller is paying some closing costs... some of their credit can go to wards paying some prepaids for you.

[Anonymous]

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@DallasLoanGuy wrote:

up front mortgage insurance premium as added to loan amount. that is why the difference there.

without looking at numbers, i dont know where we are disconnecting here on the costs.

you talk about extra 3k and i get lost.

BUT... if the seller is paying some closing costs... some of their credit can go to wards paying some prepaids for you.

---

Okay, the way I figured it (and again, I really don't think I know what I'm doing) is that our seller gave us a credit of $9240. Our closing costs were only $5896. That leaves $3344 that isn't being "used" by the closing costs. So doesn't that get credited towards the prepaids? If so, and it doesn't cover them fully, I'm either assuming that the balance of the prepaids is either coming out of the down payment we're giving ($18K) or is being rolled into the loan.

So if it's being rolled into the loan, is it possible to have more of the prepaids rolled into the loan, too? Or does that substantially change the loan terms to the point where we'd have to start all over? Would a better option be to ask if we can reduce our down payment?

The reason I ask is simply that while we'll have a good bit left over after we pay everything we need to at the table as the GFE states NOW, I'd really rather modify things enough that no matter how much more the actual settlement costs are, we'll be able to pay for everything else that we're doing and not have to use our CCs as back up -- if that makes sense.

From what I could tell, adding another $2-3K to the loan only results in a few extra dollars a month.

[DallasLoanGuy]

you need to talk to your loan officer.

you cant roll in closing costs on an fha loan, period.

you can ask the seller to pay them.

you want them to pay more than 9240, you will have to change contract.

you coulld lower down payment to cover closing costs... but the loan would be re-run thru automated.

your loan officer needs to answer these questions.