Get Your Closing Costs Covered - Purchase

How to finance closing costs into a purchase
 
If you’ve ever refinanced a mortgage, you may recall that you financed in your closing costs so that the out of pocket was little if anything.  But on a purchase it’s different.  I get asked by many buyers (when it’s usually too late) if they can roll the costs into the loan.  Most lenders will tell you this can’t be done. 
 
Technically you cannot roll the costs into the loan, but there may be a way to make the end result what you’re looking for. However, you have to know early (before making the offer) that you want to do this.  While you can’t roll the costs into the loan, per say, you can get the seller to pay the costs.
 
So how do you do this without weakening your offer price?  You offer more for the home.  For example, let’s assume the listing price of a home you want to buy is $250,000 and that you decide that’s a fair price.  Let’s also assume the closing costs you need help with are $5,000. 
 
If you make your offer $255,000 and ask the seller to pay $5,000 of the costs, the seller still nets the same $250,000 and you get $5,000 of your costs covered.  Your loan amount is a little higher and so in your monthly payment.  So effectively this is the same as “rolling” the costs into the mortgage.
 
This is a common method and needs to be discussed with your Realtor.  One challenge this method comes with is that the house must appraise for $255,000 rather than $250,000.
 
For more tips & strategies email or call me.
 

Justin Lees
NMLS 110154
Branch Manager
Supreme Lending
Justin.lees@supremelending.com
1-800-789-5998
1-916-899-6868
 

The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Supreme Lending, and do not necessarily represent the views and opinions of Supreme Lending. In no way do I commit Supreme Lending to any position on any matter or issue without the express prior written consent of Supreme Lending’s Human Resources Department.


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