Settlement Statement - FHA Loan

[tshope4205]

Question for someone who has experience with these things!  We are doing an FHA loan, and received a preliminary HUD Statement in preparation for our closing, and from what I can tell - the cash we need to bring to closing is going to be significantly less than what the FHA requirement is (3.5%), however the loan amount is compliant with FHA standards, so I guess the seller & lender credit are reducing the amount I have to pay....but I'm just confused since I thought there was a requirement to bring a certain amount of cash to closing....Anyone have experience with this?  Is it is possible that I don't need to fork over the whoel 3.5% down payment and can get away with less if it's being met through seller and/or lender credits?  Thanks for any help you can provide!

[JM-AM]

There are rules and guidelines on this.

Seller is not able to provide any assisstance with down payment.

If you are having a hard time understanding it you need to have them explain it to you. That is part of their job.

[tshope4205]

I did specifically ask previously about "the cash to close" and whether it is inclusive of my downpayment or if it's separate & it was confirmed that it was included.  Since this was the preliminary settlement, I'll wait until all numbers are finalized and see what it says.

[JM-AM]

Yes cash to close is inclusive. Did you give them earnest money up front?

Yes you should wait for final hud1 statement.

[tshope4205]

We did pay some earnest money & also the appraisal upfront, but I think it's still less than the 3.5% when all that is accounted for. 

[JM-AM]

Subtract the earnest money you paid already and see if the numbers make sense now.

[DallasLoanGuy]

your cash to close cant be less than 3.5% down minus any upfront fees and earnest monies.

preliminary huds get re-done all of the time.

lender will have to approve the deal.

[tshope4205]

It looks like I get a credit as well for taxes, because in our state they are paid in arrears - so the seller has to contribute $2900 to taxes from 2nd half of 2012.   That is then appearing as a credit on my statement - does that make a difference?

[Kay_Cee]

My loan guy told me when I was getting ready to close in September of last year, there are 2 states in the country who pay property taxes in arrears and I live in one of them.  The FHA doesn't make any accomodation for that in the way the closing costs need to be documented on the statement, so the contribution the seller has to make for the taxes isn't reflected.  My statement showed I needed to have roughly $5,000 available for closing and I had to bring a check for that amount to the closing but, I left with a check for more than $1600, which was a result of the seller's credit at close and their property tax payment.  Your LO should be able tell you what you'll need to document  you have available and what you can expect to get back at the closing.

Good luck!