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KEVIN88GT
Posts: 1
Registered: ‎02-11-2013
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Rolling in closing costs into mortgage?

Scenario:

 

This would be a Primary residence

Purchase price 500k (10% down) + closing costs

 

 Need to know the following. 

- can closing costs be rolled into the loan?  

 

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Deborah_Tripp
Posts: 2
Registered: ‎02-14-2013
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Re: Rolling in closing costs into mortgage?

Some loans allow you to do this, as long as the loan to value ratio stays within the established limits for your loan. Another option is to make a purchase offer and ask that the seller pays closing costs, which accomplishes the same thing. But again the loan to value ratio will still be the limiting factor.

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dawnsul
Posts: 1
Registered: ‎02-15-2013

Re: Rolling in closing costs into mortgage?

A great option in this case would be to ask for a seller's concession..this would allow you to finance the costs but the house would have to appraise for the purchase price with the seller's concession included (for example $515,000 purchase price with a 15,000 seller's concession would leave the seller with $500,000) but the house has to appraise for $515,000 for the bank to allow this. 

Another option woud be taking a slightly higher interest rate which would result in a lender credit back to you to use toward closing costs.  This is along the same line of the above but instead of financing more $, you are financing the costs in the interest rate.  If you were to stay in the house long-term, you are better off with the seller's concession and the lower rate if this is an option. 

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mortgage_lady
Posts: 3
Registered: ‎04-02-2013
0

Re: Rolling in closing costs into mortgage?

yes. that is called a sellers concession.  the costs can be added to the loan as long as the appraisal value on the house reaches the total loan amount on the house.

Contributor
GreenTeamHV
Posts: 22
Registered: ‎05-01-2013
0

Re: Rolling in closing costs into mortgage?

As long as you have some skin in the game (10% down) that should be fine. The banks don't want people with no money grabbing mortgages like they used to. The sellers concession is a great idea as well but be prepared for a bidding war. Usually the seller will want to pay half, 3/4's and so on for closing costs. But as I said as long as you have some skin in the game, this should be a no-brainer.