topic Re: How does this work in Mortgage Loans

How does this work

Anonymous — Tue, 14 May 2013 14:40:52 GMT

I was just talking to someone that told me that she does not know anyone that did not get money back at closing? she said that our realtor should have told us about the first time home buyers program that gives you money toward your down payment. Is this true we are taking our down payment from our savings is there a way to get down payment assistance so that we can keep our savings but still buy the house?

Is it true that if our realtor or lender did not tell us about this option that they are doing us a disservice? Any insight would be greatly appreciated

Re: How does this work

Anonymous — Tue, 14 May 2013 14:45:13 GMT

Well, most people don't get money back at closing. It would be nice, but it's not what i would call "normal", though it does happen.

As for down payment programs, you have to search for them in your area. It's something your realtor or lender could have alerted you too...but you obviously can just do the research yourself. Usually these programs are offered through your state, county, or municipality.

They are not offered everywhere.

Re: How does this work

Anonymous — Tue, 14 May 2013 15:06:29 GMT

so basically if i found a program in my state i can just apply no matter my lender

Re: How does this work

StartingOver10 — Tue, 14 May 2013 15:18:55 GMT

Foofighter is right.

First let me say that it is extremely rare for someone to get money back at closing if you look at the market as a whole. It happens when the credits are larger than the charges which usually means the buyer has already paid more than is required for the purchase or was able to finance a larger portion.

There are first time homebuyer programs in the various communities that may be available to you, but you have to qualify for these programs. The down payment is typically funded by a government program for which you have to qualify. Also, from what I have seen the interest rate is a little higher to allow the lender to participate in some of the closing costs. The selection of properties is usually restricted to designated zip codes. Your household income is restricted too usually based on the total number of people that live in your household. If your community offers a first time homebuyer program you can research the criteria that your community has for your purchase. You may or may not qualify for the purchase. The most common reason you wouldn't qualify is if your household income or assets is more than what the criteria will allow.

Also, these programs are in high demand, as you can imagine. As a result, the program may be there but the funding may be exhausted prior to the refunding period. Ask the housing rep if there are remaining funds. Usually when I call they are out until the new fiscal year. Remaining funds are not posted on the website, you only get that information if you specifically request it.

Allow extra time to close for this type of funding too. What normally takes 30 to 45 days to close on a resale takes 3 to 4 months with the housing program due to time periods to process through the county funding program. The housing rep will be able to answer this too.

Re: How does this work

Anonymous — Tue, 14 May 2013 15:18:35 GMT

And another reason why I wish I lived in an area where startingover could be our realtor. lol

Re: How does this work

StartingOver10 — Tue, 14 May 2013 15:20:27 GMT

lol...thank you!

Re: How does this work

tooleman694 — Tue, 14 May 2013 15:58:22 GMT

If I went USDA instead of FHA I would have gotten all of my earnest money at closing.

Re: How does this work

Anonymous — Tue, 14 May 2013 18:46:11 GMT

@tolleman694 is that a standard practice with USDA loans to get the earnest money back?

Re: How does this work

StartingOver10 — Tue, 14 May 2013 23:25:31 GMT

He got it back because he put down earnest money when the contract offer was made, but he financed the entire purchase so at closing the excess funds were refunded to him.

Re: How does this work

Anonymous — Wed, 15 May 2013 00:54:26 GMT

I was told today that when I close tomorrow ill actually be getting a little over 2k back.

Re: How does this work

ESA2012 — Wed, 15 May 2013 01:05:20 GMT

maybe someone can answer this..

my GFE says i need about 800.00 to bring to closing.. we are getting our house paid through a down payment assistance program (tribal) 3.5% they cover it, im getting 5000.00 towards closing from the sellers. We also paid 500.00 upfront towards the earnest. where does the earnest go? they told me towards the down payment but,... down payment is covered. we needed 4600.00 (roughly) and got a grant for 4999.00

Re: How does this work

Anonymous — Wed, 15 May 2013 01:14:56 GMT

I'm doing new construction and put $1700 as earnest money plus $500 for additional upgrades. The builders are paying $3k in closing and my realtor is paying $2k, it would be great if my earnest money is refunded. Guess I will find out in September.

Re: How does this work

Anonymous — Wed, 15 May 2013 04:40:56 GMT

My earnest money (1,000) went towards downpayment costs.

Re: How does this work

Anonymous — Wed, 15 May 2013 12:26:12 GMT

@ESA2012 wrote:
maybe someone can answer this..
my GFE says i need about 800.00 to bring to closing.. we are getting our house paid through a down payment assistance program (tribal) 3.5% they cover it, im getting 5000.00 towards closing from the sellers. We also paid 500.00 upfront towards the earnest. where does the earnest go? they told me towards the down payment but,... down payment is covered. we needed 4600.00 (roughly) and got a grant for 4999.00

Well how much are your total costs for getting the loan? You have a down payment, closing costs, and prepaids (insurance, interest, etc)...by what you've indicated here, your down payment was about $4600. So the house you're purchasing is around $131,000. You've got $5,000 from the seller, another $4999 from the down payment grant, plus $500 you've paid, and another $800 due at closing.

That's roughly $11,300 total to get the loan. down payment is 4600, so about $6700 left in closing costs and prepaids. Your earnest money will go to paying those.

Re: How does this work

ESA2012 — Wed, 15 May 2013 13:04:35 GMT

I relooked at my papers and the earnest is included in the costs towards the money needed so i will owe 607 at closing, i was given 2 GFE due to changing my interest rate.

Re: How does this work

tooleman694 — Wed, 15 May 2013 14:10:52 GMT

I think my earnest money was like 15,000. Since USDA didn't require a down payment I would have gotten a check for 15k at closing.

But we went FHA instead, so instead of getting my money back I had to write a check for like 20k at closing to cover the down payment and closing costs.

We bought a house that was over the FHA limits, so every penny over the limit came out of my pocket. Ended up putting like 10 percent down.

Re: How does this work

Anonymous — Wed, 15 May 2013 19:28:52 GMT

thanks for answering that question i actually called my lender and she told me that it would have to be USDA or a community program with higher interest rates and fees. And after hearing it takes longer adn i have to qualify i am pretty sure it would not be worth the hassle. Just blessed to have the money available to pay the down payment