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This is collecting the entire year's worth of taxes upfront, so that it can be paid out during the year, as the taxes come due. The account this money is kept in is called escrow. They also want the year's homeowner's insurance to be paid up front, also in escrow. Some lenders ask that you obtain and pay for it on your own and others want it up front. This is the preference of your lender. I would *not* use whomever they choose... shop around. You'll also be paying the first month of interest too. The mortgage officer only estimates closing costs until closing... you won't have the actual, solid number until shortly before the closing date. You'll have an estimate but it probably won't be the same number.
You can ask the seller to pay an amount higher than $4000 though. Anything up to 6% of the purchase price for an FHA mortgage... $7800 on a $130K home. I'm not sure if/what the limit is for a conforming loan.
The lender you choose will also want to see a reserve in your account, to know that you'll be able to afford to set up your home and make payments on your mortgage without problems. I'd say about $5000 would be plenty to ease their financial requirements.
A "conforming loan" is just a loan of a reasonable amount (I believe it's $417K or less, unless things have recently changed), that is taken by well-qualified borrowers who are making a down payment of 20% or more. An FHA loan requires a downpayment of 3.5% or more, their own mortgage insurance paid for at least 5 years (ie you have to pay it even after you've paid it down enough to own 78% of your home and get rid of PMI), and the down payment can come from a family member.
I'm not sure about the rules concerning who can contribute toward a downpayment with a regular, conforming loan. My knowledge on all of this only stems from our own experience before starting our househunt in early 2008. I'll look it up...
You never cease to amaze proulx. So, is it correct to say that since I've already paid the taxes and insurance upfront, I won't be paying it for the remainder of the year (that is, I only have to pay for the principal+interest)?
Unfortunately, no- they like to have it in advance, so that the balance is never in danger of falling below zero. That said- it seems strange to have the ENTIRE year at once. I would call other lenders and ask if that's what they do as well. It's overkill, in my opinion. Maybe a few thousand but *all?* No.
This should help... long but it goes over pretty much *everything* that will be asked of you. I really could have used this a few years ago. lol - much better to have it all in one place than researching for months on the internet. :P
[quote=crease123;12487791] closing cost of $4,000 (which we can try to get the seller to pay) and a "property tax escrow and upfront insurance fee" of an astonishing $7,051! [quote]
It's pretty normal when you buy your first house to ask for the seller to pay the closing costs. I did that when I closed on my first house and it helped a lot.
Just a quick question: how is the east-Syracuse, Minoa neighborhoods in terms of desirability and, more importantly, safety? Like will I get raped when I'm walking my dog? I do no want to get raped.
Just a quick question: how is the east-Syracuse, Minoa neighborhoods in terms of desirability and, more importantly, safety? Like will I get raped when I'm walking my dog? I do no want to get raped.
It is generally a fine area. There isn't anything to worry about.
We are finally going to view houses officially this weekend! The excitement!
A new thought just came into mind:
Should we proceed to purchase our house, my fiance and I intend to live in it for 5-6 years before we move back to her hometown. Given this cirumstance, would it be wiser to do a 7- year ARM instead, given the potentially lower interest rates?
We viewed 15 houses over the weekend, and saw a house that we like! It's on Croyden Lane, Dewitt, right across from the rental apartments. It's a nice size house with a beautiful interior. We are a little concerned with the location. Can anyone provide us with some feedback of the location in terms of desirability and safety?
We viewed 15 houses over the weekend, and saw a house that we like! It's on Croyden Lane, Dewitt, right across from the rental apartments. It's a nice size house with a beautiful interior. We are a little concerned with the location. Can anyone provide us with some feedback of the location in terms of desirability and safety?
It is fine over there. That home is in the Jamesville-DeWitt SD, which is a very good school district and many of the people that live there are affiliated with Syracuse University. You are also close to the campus, the hospitals and I-481, which will take you to the Thruway.
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