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can cosing costs be rolled into the mortgage?

i have about $10,000. I am buying a house for around 230k. I need to put at least 3% down? and pay for closing costs?  There could be a $10k difference.  Can somebody clarify this
  • May 12 2010 - East Haven
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Answers (10)

Yes, asking for sellers concessions is the way to go to handle what your trying to do. Depending on the loan product, they usually allow 3-6% of the purchase price.
  • June 04 2010
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Check with your Mortgage Broker to see exactly what percentage of concessions they will allow the Seller's to pay towards closing and make sure your Agent writes it in your contract when it comes time to buy.
  • June 04 2010
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Wayne is correct, but if you are a first time hme buyer, you may want to look into a CHFA loan.  The CHFA loan is a FHA insured mortgage for first time homebuyers that allow eligible buyers to borrow the down payment and/or closing costs (on a need basis) as a second mortgage.  For more information on the CHF program go to http://www.therenovationloanguy.com/CHFA.html .

  • May 13 2010
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Not sure why the Realtors responding think that closing can be rolled into the new loan on a purchase as that is not possible.  Your options would be to negotiate with seller on a price that includes them paying for all or part of your closing cost (up to 6% of sales price) or having lender increase the rate and pay all or part of your closing cost. Or course you could do a combination of you, seller, and lender paying closing cost. By increasing interest rate by .50 the lender should be able to pay $6K or more of your closing cost which is a good option if you plan on being in property less than 6-7 yrs.
  • May 12 2010
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In most cases closing cost can be rolled into the mortgage.  Consult your agent if you have one, and lender.  Most loans have a cap on what the total amount of closing cost can be,ie., 3% of the purchase price up to 6% of the purchase price.
  • May 12 2010
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Yes, the closing costs are in addition to the down payment funds.

Yes, you should talk with your lender first to make sure it can be done,

If you are already in contract to purchase the house you should to your agent or the seller about renegotiating to roll the closing costs and prepaid items (property taxes, any prepaid interest, etc.) into the mortgage.

Also the house will likely have to appraise for the higher amount since you may be increasing the gross sales price for the house. Here is a blog post with more info on sellers concessions.
  • May 12 2010
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If you are already under contract to purchase the house you will have to talk with your buyer's agent to renegotiate to roll the closing costs and prepaid items (taxes/interest/etc.) into the mortgage.

Yes ask your lender if they will allow it but you also have to make sure the seller is ok with it. Also the property will likely have to appraise for the higher sales price which includes the amount of the seller concession. Here is blog post about sellers concessions with some general info for you.

  • May 12 2010
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In most cases 3% of the closing costs can be 'rolled into the mortgage', but not the down payment.  Also if your talking about going FHA it is now 3.5% down.
  • May 12 2010
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A few thoughts on this...

My first response / suggestion is the obvious and that is to speak with your mortgage lender directly to gain a better idea as to the overall costs involved inclusive of approximate closing costs..

I always educate my clients when shopping for mortgages to ask for a Good Faith Estimate (GFE) from the lendr which will include approximate / estimated costs associated with the loan.

Another option I suggest to my buyer clients when submitting an offer on the property and negotiating w/ a seller - is to request the seller provide closing costs.

The webjumper below should provide you with further insight...

http://loan.yahoo.com/m/securing9.html


Best of luck moving forward..!

Cheers, Josh
  • May 12 2010
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I would suggest asking your lender about the options available.  Your options will be based upon the data you give your lender and the products that meet your needs.  So please call your mortgage professional as they can work with you on solutions.  Remember to communicate this information to your real estate agent.
  • May 12 2010
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