About Mortgage Closing Costs
Even if you are doing a No Closing Cost loan, you may need to bring funds to your house closing. Your loan office will review with you your transaction summary worksheet at the beginning and end of the loan process so you understand just how much you will bring to closing and why.
The Money You Bring to Closing
is NOT a Cost or Fee. These Funds are Either:
- Interest you owe on your loan
- Escrow deposits
- 3rd party expenses not related to the mortgage
Together, these expenses are referred to as pre-paids.
While You Bring Money to Closing it Comes Back to You in Two Ways:
- You will not make a payment the month after you close
- Your current lender will send back the ALL the money in your current escrow account
The attorney must collect for the new escrow account whatever amount should be in that account at this time of year (pro-rated). You will receive a refund from your current lender for any funds they are holding in escrow for you (usually about 14 days after we close). There is also one month of interest collected at closing, but this is accounted for — you won’t make a mortgage payment the first of the next month.
About Skipping a Payment
We know that many mortgage loan officers tell their customers they get to skip a payment but it’s simply not true. The lender is not going to give you a month for free. To skip a month, your loan balance would need to raised.
For some people bringing zero cash to closing is helpful. DNJ understands, and we can do that. The funds required at closing can usually be added to your loan balance if you choose. But what we won’t do is deceive you and hide the funds in your loan balance.
Just How Much Money Will I Need at Closing?
The final number on how much to bring will come from the attorney when a HUD-1 statement is completed. Up until closing we will have a good estimate, but will not know the exact amount.
The federal government made changes to the Good Faith Estimate (GFE) in 2010. It is important to note that the GFE form does not show the amount to bring to closing. That is why we provide a Transaction Summary Worksheet.
This worksheet amount will change as we verify your payoff, the monthly tax and insurance amount. The timing of your last payment and the closing date also impact the amount of money you’ll need to bring to close on your new home. So while we provide a very a good estimate, it is not exact until the attorney has completed the HUD statement.
Have Questions? We’re Here to Help!
Call DNJ Mortgage for more information on closing costs and to discuss our No Closing Cost loan options.
We’ve earned the trust of homeowners in the Triangle, the Triad the Outer Banks, Western North Carolina, Virginia Beach, Rehoboth Beach, the Eastern Shore of Maryland, the Eastern Shore of Virginia, and more – Let us earn yours!
DNJ also offers mortgages in Tennessee, South Carolina, Georgia and Florida. Call today!
