Closing cost who pays what??

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  • #40508
    TheWilliams
    Member

    Does the seller/builder pay anything and or are they required to pay a % percentage of closing if so what’s the percentage. I thought Naca covered closing if we ask for 4K towards closing can this be in turn be placed towards buydown funds. How much control do we have on allocation of funds besides the required taxes insurance etc paid up front. Also we are putting 5 k deposit to start the build is this factored into the buydown etc at closing. Just asking because we want this deal to work but it can’t if they have to pay 25k for us to get into the house because we are subject to Naca maximum acquisition cost of the area. Please let me know!!!!

    #40538
    TTrumble
    Member

    Hello TheWilliams,

    Sellers/builders are under no obligation to pay anything toward closing, buydown, etc.

    Under the NACA program, actual closing costs are paid by the bank. Not rolled into the loan or hidden somewhere else. The bank pays the closing costs, period.

    Any funds contributed by the builder toward “closing costs” will be applied toward interest rate buy down, up to a maximum of ten points (10% of the loan amount).

    The $5,000 deposit is considered “earnest money” and is refunded/applied at closing.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #64904
    frustrated
    Participant

    Hello TheWIlliams,

    I am about to sign a purchase agreement with a seller to purchase their home. However the Purchase agreement is showing that the seller is owing $9,750 in seller costs. Does this sounds correct? under the reason why, it states…..

    Fees payable to Seller’s lawyer or to a closer [”title closer”] for conducting the title-transfer portion of the closing. If Seller is not providing a lawyer or title closer for the title-transfer portion of the closing and if Buyer is obtaining new mortgage financing and the closer’s fee is not separated into a “title closing fee” and a “loan closing fee,” then Seller shall pay one half of the closer’s fee or $9,750, whichever amount is less.
    And also the following costs:

    I need to know what this is for

    Thanks,

    #64907
    Nelsont
    Member

    You shouldn’t have to worry about that. First of all as tim mentioned the seller is not obligated to pay anything. If the seller does pay something then they agreed to it. Remember when submitting a contract both the seller and the buyer have the right to decline a clause. As long as the seller has agreed and the fees have zero bearing on you then that is the least of your concerns. Second bank of America pays all closing costs. Your contract won’t say that. You are getting wrapped in legalese when you don’t have to. All contracts are pretty much templates and this one I’m sure is a fill in the blank. Your question is giving the impression that you are skeptical of a nearly 10k gift. Just be glad naca is giving you this amazing opportunity. The seller agreed. They are ok with it to begin with. They will be pleasantly surprised when the bank pays the title company and attorney for them.

    #64912
    frustrated
    Participant

    Thanks for the replay nelsonT.
    I get that, but I think you’re missing the point. I’m seeing the seller is bringing 10K to close. But I’m looking for eduction on where that 10k is going? Can it be used for buydown? Can it be used for principle reduction? What is it for?

    All I’m being told is it’s for fees. But what fees if lender is covering all fees?

    #64914
    Nelsont
    Member

    Any money the seller brings to the table will first be applied to money owed then to any extraneous fees that may not be covered then to buy down then to principle reduction.

    #64917
    frustrated
    Participant

    Ok thanks. Now the question remains. Who can provide me a breakdown of IF any money is owned, if there any extraneous fees? And what those may be.

    As of now as I mentioned, the realtor has simply said it’s for fees. But he himself is unable to provide me with that Info.

    #64918
    Nelsont
    Member

    The seller. And their finances are their personal business and are under no obligation to provide that information nor is there any legal precedent to do so. Just as they have no idea what your finances are like beyond you can theoretically afford their house. You usually will never find out what the seller owes money on unless they are underwater and it comes out in negotiations they can’t afford to concede certain things.

    If it concerns you or the seller is open about their situation then you’ll find out at the closing table.

    • This reply was modified 2 years, 5 months ago by Nelsont.
    #64920
    Nelsont
    Member

    This is a need to know business. If the issue is not surrounding your personal money time or energy then you almost never need to know.

    #64926
    Peapod0609
    Member

    @frustrated the sellers under NACA loans have less closing costs because BOA pays for some of the settlement fees. They save $2,000-3,000 or so by going through NACA, and there are no other additional costs above a normal mortgage process by going through NACA. It’s actually a benefit of the NACA loan and should be seen as an incentive for the seller to take offers.

    Are you going with an outside realtor and not a NACA realtor? If so, they might not know about this, and you should explain to them that BOA pays for some of the settlement fees at closing for NACA clients and this actually saves the seller some money. So if your contract says that they were going to pay for some closing costs that they agreed to, and since they might have to pay for these closing costs with NACA, maybe you can negotiate that money to go somewhere else. Is this kind of what you are getting at?

    I would tell your agent this and see what they say.

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