Posted on: 29th Oct, 2013 02:23 am
Some lenders may include some, or all, of the closing costs in the loan amount by agreeing to a slightly higher interest rate.
For example, Kris is interested in taking a loan of $400,000 for 5 years at 3% interest rate from Carole. The closing costs amounted to $2,000. Kris asked her to include the closing costs in the loan amount. She agreed to that by increasing the interest rate to 5%.
For example, Kris is interested in taking a loan of $400,000 for 5 years at 3% interest rate from Carole. The closing costs amounted to $2,000. Kris asked her to include the closing costs in the loan amount. She agreed to that by increasing the interest rate to 5%.
Closing costs may be included in the loan amount for a refinance mortgage.
Closing costs cannot be included in the loan amount for a purchase mortgage.
If the lender raises the rate to help you pay some costs, the loan amount did not change. You may not have had to pay the costs out of pocket, but, the loan amount did not change---the mortgage rate changed.
Closing costs cannot be included in the loan amount for a purchase mortgage.
If the lender raises the rate to help you pay some costs, the loan amount did not change. You may not have had to pay the costs out of pocket, but, the loan amount did not change---the mortgage rate changed.