Has anyone purchased a house and rolled in their closing costs? A freind of mine is buying a house and she put no money down and is rolling in her closing costs. I know it will make the mortagage payment bigger but has anyone done this? Is it too good to be true?
Meaghan729
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Re: Rolling in Closing Costs
I didn't do it, but it can be done. you need to do a sellers concession though. since you are financing over 100% of the cost of the house, the house has to appraise for more (to include the closing costs) and the sellers have to agree.
lilqtpie2181
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i didnt do it but i dunno if its worth it I guess it depends on whatu can afford monthly and at the time of downpayment. it is possible though
EJSD2006
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yes, its called a sellers concession. meaghan is right that the house MUST appraise at the value PLUS the concession to even qualify. and if the house doesnt appraise, then you'll need to come up wtih those closing costs anyway so dont even TRY for it unless you have the funds as a backup. its not a popular move, but its been done. honestly, if you can get away with it then do it. because you wouldnt really feel an additional $15k on your mortgage, its really only about $100 more a month.
HotAir
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So, basically, you can go into it wanting to roll in the closing cost and even if the house is worth the amount and the closing costs the seller might not agree to it?
EJSD2006
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Posted by HotAir
So, basically, you can go into it wanting to roll in the closing cost and even if the house is worth the amount and the closing costs the seller might not agree to it?
the only reason sellers are turned off by it is because they have to pay taxes on the higher amount (not that its alot). alot of listing agents will advise their sellers not to take a sellers concession because its too risky, theres always a chance that it wont appraise at that value. then the sellers would have lost valuable time on the market. if you really want to try for it, when you make an offer tell the homeowner you'll pay for the appraisal before you go to contract. but then that's a risk the buyer will have to take. FM me if you want more info.
HotAir
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OK, that makes sense. Thanks so much!
cindyandkevin
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That's what we did. We didn't have much for a down payment and so our mortgage broker encouraged us to go for this, it doesn't really make that big of a difference on our monthly payments and we still have our savings. Yes it's risky but the house appraisal went really well and the sellers wanted to move into their new house so they agreed to the concession.
