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Good Faith Estimate and cash outlay

Hi!  We are closing on our house next Friday....we are first time buyers.  I had a question regarding the good faith estimate (GFE) and actual cash needed at closing.  First, this is a FHA loan, we are only putting 3.5% down.  I know that there is an upfront charge for PMI...in this case it is around $2K.  The loan officer also added this amount to my mortgage (he didn't ask, but I guess from what I've heard this is a common practice).  So my total costs per the GFE are $7K...but that includes the $2K of upfront PMI.  Does this mean that the NET cash I need at closing will be $5K (give or take changes)?  I really want to know what my cash outlay will be....and it is my understanding that I may not know until 24 hrs before closing.  ( I asked the loan officer this question...his response was "the attorney will let you know").

Any help you might have is appreciated.  Thanks!
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March 18 2010 - Providence
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These types of loan officer/buyer issues always bother me.  You loan officer should know within a margin of 10% or less how much money you will need to bring to the table.  The attorney will create a more accurate number but once again your loan officer should have the answer at their finger tips.  By this time, you should know your rate, terms, cost and cash to close. 

Hopefully you will not have any surprises.

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March 18 2010
This is an example of a consumer not receiving pertinent information from the new mandated GFE. Not only does it not provide the total amount due at closing but there are fees required to be added i.e. the financed UFMIP and/or the Owners title policy. (neither of which may be a borrower's fee due at closing)
It is really naive for your loan officer to expect you to wait until " the attorney" tells you what the total amount of funds due at closing. You should be able to receive a loan summary that would be with in $100-$200 of actual amount due at closing. If loan officer was expected to show up at closing with a Cashiers Check, they would expect to know that # well before the closing. The FHA "up front PMI" (UFMIP) should be financed in the loan and would as you mentioned not be due at closing. Call your loan officer and get an accurate amount to bring to closing. Talk to the manager if that doesn't work.
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March 18 2010
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Thank you for the advice, Wayne. I am going to do exactly as you suggested - I am going to contact the loan officer.  Thanks again.
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March 19 2010
You may find your answer in the Application, on Page 4 in the transaction details, if you received a copy. That's where the loan officer would have "told" you the amount, the first time.

The LO is trying to avoid the confusion of him telling you the "estimated" number that all above have mentioned, and the attorney having a slightly different number 24 hours before close. The two numbers never fail to differ, and it is a regular cause of 40-minute, last-minute phone calls.

I'm not trying to excuse his approach. He should have just told you what I just did, and referred to page 4 as the best source for the data, and/or give you an old type GFE/Worksheet that contains the info. Instead he went with the terse approach.

Some, if not most, LO's these days have a "what I say, can, and will be held against me" approach, and try to limit their sayings. He would rather the Attorney be the next one to say that number. You certainly can get with your attorney and see if they could tell you now. You'll likely get some similar gibberish from them.

You will not have to pay the upfront MI twice.
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March 19 2010
Manuel and Wayne,...relax. Don't be so quick to diss our fellow LO's. This is a case of the Buyer not communicating with his Lender and/or not trusting his Lender.

What Wayne and Manuel are forgetting to tell you is the escrows can change, there can be title & credit updates, you may owe $500 to Seller for the oil heat left over,.... etc., etc... Many of the items on the GFE have a 10% variance. Some do not. Things can and WILL change from application to closing. Look at your GFE's,...the answer is there as best can be answered. If you are worried that you may be short, you may want to discuss with your LO what the worst case scenario can be.

Yes, if the UFMIP is $2k and your total closing costs are $7k,...you owe $5k plus your 3.5% down payment.
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March 19 2010
Robert,
How often do you think a buyer should have to ask their loan officer for something as important as "how much will I need to bring to closing ?"
I guess we do business differently and if it is too difficult for LO to answer the question, they probably shouldn't have taken the application.
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March 19 2010
Wayne Rocks! He gives a straight answer with no BS
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March 19 2010
I am with Wayne on this one the LO should be able to get within $500 of what you will need the only things they won't be able to estimate are adjustments for Oil in the Oil tank.
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March 19 2010
Me too! I'm with Wayne!
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March 19 2010
 
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Good Faith Estimate and cash outlay
  • Posted by theshubes22
  • In Mortgage
  • March 18 2010
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