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showing funds available to close question

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Anonymous
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showing funds available to close question

I have a question about being cleared to close.
I was told by my LO that my loan was approved and I will get my list of conditions tomorrow.  She said one of the conditions will be to show funds available to close.  My closing costs are going to be around 7700.  I am scheduled to close on 10/16 (assuming I get the 'clear to close').  My question is this.  I only have two more pay checks before my closing date.  I get paid on 10/2 and on 10/16.  On 10/2 I am going to have 7400 in my bank account or about 300 less than I need to close (I'll have over 10K on 10/16).  Is this going to be a problem with the bank?   I have worked at my job for 13 years so my work history is good and it is clear I'm going to get paid on 10/16 but I didn't know if being short 300-400 bucks will stop them from giving me the go ahead to close.  I had to come up with an extra 3K last minute due to a change in the amount of seller assist (appraisal came in low and had to renegotiate price etc...) which is why I am so close to the wire here.  I worked as much overtime as I could to make the extra cash but I'm still going to be short that 400 bucks!  The closing date could not be changed because seller is also closing (as well as the people he is buying from) so an extension is not possible....
Message 1 of 7
6 REPLIES 6
ShanetheMortgageMan
Super Contributor

Re: showing funds available to close question

I'd provide the bank statement that would be available on 10/2, and also write a letter explaining how the remaining funds to close will be from your paycheck you'll receive on 10/16.  If you get paid in regular intervals then also put that in the letter, and also mention how at closing you'd be able to bring in a branch printout of your checking account showing the money is in there and a copy of the paycheck stub "sourcing" the amount of the deposit (if it's not direct deposited into your account).  That should likely do the trick.
Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 2 of 7
Anonymous
Not applicable

Re: showing funds available to close question

You could also offer $1K more in purchase price and ask for $1K in closing costs, if you get into a real pinch. You are essentially financing the closing costs that you can't afford up front.  
Message 3 of 7
ShanetheMortgageMan
Super Contributor

Re: showing funds available to close question

That won't work, appraisal already came in low, plus the underwriter won't permit a dollar for dollar increase to the sales price for the sole purpose of the seller paying more of the buyer's closing costs.
Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 4 of 7
Anonymous
Not applicable

Re: showing funds available to close question

Thanks Shane and Daniel....well one more hurdle crossed...my brother is going to gift me the money I need...

 

This has been a stressful few weeks.  I am going to be so glad when I have those keys finally in hand!

 

Lucy

Message 5 of 7
ShanetheMortgageMan
Super Contributor

Re: showing funds available to close question

Nice, are you aware of the gift requirements?  Gift letter, copy of cancelled check, a copy of the donor's statement, and then a copy of your statement after the funds are deposited?  In lieu of the money going into your account, your brother can just write a check at the closing table to the closing agent, then you won't need a copy of the cancelled check your bank statement after funds were deposited.
Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 6 of 7
Anonymous
Not applicable

Re: showing funds available to close question

Thanks Shane, yes...my LO sent me a gift letter for my brother to sign and told me I may need to provide a copy of his statement which he is also aware of and fine with. I'm in the home stretch now! Only 23 days until I close!
Message 7 of 7
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