My question in regards to closing costs are: Can closing costs be rolled in to a new mortgage? I know that it can be done for refinancing. I am trying to reduce money out of pocket.
A lot of varaibles here. FHA will allow seller to pay certain closing costs for the buyer which could raise the price. The appraisal is also a factor. If the appraisal is too low the costs probably can not be added to the loan. I have added repair allowances into the price to be given back to me at closing. Really need to check with your lender or mortgage broker to get their input.
Hope this helps
Before setting up, or submitting your purchase agreement to the lender, you need to know what kind of seller concession will be allowed on the deal. If the seller concession allowed will not allow enough for you to close with the minimum amount of money out of pocket, a way of help further reducing the cost to you, is to have most the title charges paid by seller, separate from the concession, thereby allowing minimum title cost to you, and you still have the have full concession to work with to pay the other expenses of the loan. Also check the date of closing, close on a date where you will not have to make in prepaid interest payments on your loan till first payment is due.
"Seller pays all Buyer's Closing Costs" works in all cases. Sometimes, it has to be on a separate Addendeum that is not given to the Institutional Lender.
Sometimes it has to be on separate addendeum, stating in different words, Seller to credit (Someone you trust) $xx for repairs and landscaping.
Main thing is... This is presented at the first part of the negotiations. "I have a sales price of $XXX, but am asking you to pay $YYY, so your net sales price is really $ZZZ". You want it up front and not 'Discovered' later in the presentation.
A lot of varaibles here. FHA will allow seller to pay certain closing costs for the buyer which could raise the price. The appraisal is also a factor. If the appraisal is too low the costs probably can not be added to the loan. I have added repair allowances into the price to be given back to me at closing. Really need to check with your lender or mortgage broker to get their input.
Hope this helps
Ted Jr
Ask the seller to pay for the Closing costs in your offer.
For pmatheson1:
Thanks for the advice. Could this method work for properties that are owned by the banks as well?
Before setting up, or submitting your purchase agreement to the lender, you need to know what kind of seller concession will be allowed on the deal. If the seller concession allowed will not allow enough for you to close with the minimum amount of money out of pocket, a way of help further reducing the cost to you, is to have most the title charges paid by seller, separate from the concession, thereby allowing minimum title cost to you, and you still have the have full concession to work with to pay the other expenses of the loan. Also check the date of closing, close on a date where you will not have to make in prepaid interest payments on your loan till first payment is due.
"Seller pays all Buyer's Closing Costs" works in all cases. Sometimes, it has to be on a separate Addendeum that is not given to the Institutional Lender.
Sometimes it has to be on separate addendeum, stating in different words, Seller to credit (Someone you trust) $xx for repairs and landscaping.
Main thing is... This is presented at the first part of the negotiations. "I have a sales price of $XXX, but am asking you to pay $YYY, so your net sales price is really $ZZZ". You want it up front and not 'Discovered' later in the presentation.