Our friends got money back and we didn't?

Here are the rules. Normally borrowers only get money back in a cash out refinance transaction. However, buyers may get money back for a number of factors.

1. They may be getting part of their earnest money back at closing (money they already put up). On the closing HUD, their credits exceed their debits.
2. They may be getting money back that is earmarked for pools, barns, fences, repairs, etc. This is specific to the buyers’ loan and is not always an option. Typically, it will be held by title co. and given to contractor upon completion of repairs, etc.
3. They may be getting seller or lender paid money that must be applied to closing costs. Again, their credits exceed their debits.
4. They may not have an escrow account that pays their taxes. Pro-rated taxes they receive from the seller could seem as cash back. In reality, it is not. That money will be due at end of year.

Technically, home buyers can only legally get money back at closing through these scenario's. Real estate deals are complicated and often times parties may not realize what the monies are for...thus the need for a real estate professional to sort out the details...contact Kerri Tullous or Rich Martinez for rescue! Click here for more real estate news.

Written by Reid Mitchell, Mortgage Banker at National City Mortgage