CW bought a house!
This is the best I can remember:
CW: we were supposed to get the house this week, but the loan guy says we need to bring 13 thousand dollars to closing. That's ridiculous!!!
me: that doesn't sound too bad. Your house is about the same price as mine was.
CW: how much did you have to give them in closing?
me: 11 grand.
CW: see? 13 is crazy!
me: it seems ballpark right. And remember, my loan was smaller than yours.
CW: no, our house is less than yours [his is 284k, mine was 292k]
me: but your loan is larger [he is putting 0% down] and I'm not totally sure, but I think some of the closing costs are based on the loan size. like, you're supposed to estimate closing costs as a percentage of the loan.
CW: no, our house is less than yours.
me: but you are putting less down. I put 25 thousand down, so I actually showed up to closing with a cashier's check for 36 thousand dollars, and I got a loan for 267 thousand. If you don't have a down payment, your loan will be larger.
CW: we did have a down payment! We gave them 5 thousand so we got first dibs on the house.
me: that sounds more like earnest money? A down payment makes your loan smaller, because you're giving the seller some of the price directly so you don't have to borrow as much from the bank.
CW: that's not how down payments work. They don't affect the amount of the loan.
CW: oh, and they're saying we have to bring more now because of taking my name off the loan [his credit wasn't great]
me: well, yeah, it's not a VA loan anymore.
CW: the VA loan doesn't have anything to do with it!
CW: did you really have to pay 36 thousand?? how do you get that much money?!!
me: I saved it for a down payment! You know, if you don't have enough money to close on the house, your real estate agent can probably find a way out for you, it's not the end of the world.
CW: we'll get it from [wife's] parents, they always have money. Don't use this loan company, they're ridiculous.
He called me four times last week to have this same conversation. I am just waiting for the day CW uses an online amortization calculator, doesn't understand that the calculator shows only his P+I, and thinks the loan servicer is fleecing him with the escrow payments.