Posted on: 10th Jun, 2010 10:49 am
Hi all,
I live in MD, and am trying to use an FHA loan for my first home purchase. This should be a simple question: Can I finance my closing costs? Asked another way, can I roll them into my mortgage amount?
If I offer $330,000 for a house, and have roughly $12,000 in closing costs (not including my down payment, which will be out-of-pocket), can I essentially just finance $342,000?
I've heard adamantly that I can, and I've heard adamantly that I cannot. My Realtor and my lender tell me I cannot, but I keep seeing websites like this one that tell me I can (sorry for having to spell it out): mortgageloanplace[dot]com[slash]fha_closing_costs[dot]html
And just when I'm becoming convinced that I can, I read another website that says I cannot: mortgagenewsdaily[dot]com[slash]wiki[slash]FHA_Closing_Costs[dot]asp
Which one is telling me the truth? I also called a second lender in MD who told me that I cannot finance my closing costs. He told me it is not a MD thing, just an FHA thing, and that even traditional loans don't allow closing costs to be rolled into the mortgage. But my dad is convinced that he's done it on pretty much every home he's ever bought. How could I be hearing so many polar opposite answers?
If anyone has any insight I would appreciate it. And I'd be particularly interested if anyone could take a stab at why there are two sides to this camp. Thanks very much.
P.S. I understand that I can ask the sellers to pay the closing costs, which may mean raising the offer for the house by a certain amount to keep the deal attractive to the sellers. But this should never be mistaken for "financing the closing costs", so I don't accept that as a reason I'm hearing that it can be done. Thanks again.
I live in MD, and am trying to use an FHA loan for my first home purchase. This should be a simple question: Can I finance my closing costs? Asked another way, can I roll them into my mortgage amount?
If I offer $330,000 for a house, and have roughly $12,000 in closing costs (not including my down payment, which will be out-of-pocket), can I essentially just finance $342,000?
I've heard adamantly that I can, and I've heard adamantly that I cannot. My Realtor and my lender tell me I cannot, but I keep seeing websites like this one that tell me I can (sorry for having to spell it out): mortgageloanplace[dot]com[slash]fha_closing_costs[dot]html
And just when I'm becoming convinced that I can, I read another website that says I cannot: mortgagenewsdaily[dot]com[slash]wiki[slash]FHA_Closing_Costs[dot]asp
Which one is telling me the truth? I also called a second lender in MD who told me that I cannot finance my closing costs. He told me it is not a MD thing, just an FHA thing, and that even traditional loans don't allow closing costs to be rolled into the mortgage. But my dad is convinced that he's done it on pretty much every home he's ever bought. How could I be hearing so many polar opposite answers?
If anyone has any insight I would appreciate it. And I'd be particularly interested if anyone could take a stab at why there are two sides to this camp. Thanks very much.
P.S. I understand that I can ask the sellers to pay the closing costs, which may mean raising the offer for the house by a certain amount to keep the deal attractive to the sellers. But this should never be mistaken for "financing the closing costs", so I don't accept that as a reason I'm hearing that it can be done. Thanks again.
mrpowell3
Nice question!!!
Firstly, there is no such thing which is impossible!!.
Question remains how you want to accomplish it.
If you go by all ethical terms it is not possible to finance your closing cost.
but if you are trying to be smart (unethical means) then it really possible to finance the closing cost.
I hope you could be able to differentiate between unethical and ethical,as you are a wise fellow.
Nice question!!!
Firstly, there is no such thing which is impossible!!.
Question remains how you want to accomplish it.
If you go by all ethical terms it is not possible to finance your closing cost.
but if you are trying to be smart (unethical means) then it really possible to finance the closing cost.
I hope you could be able to differentiate between unethical and ethical,as you are a wise fellow.
MrPowell.
Please don't listen to whoever that is advising you to commit mortgage fraud and risk jail time.
NO, it is not possible to finance your closing costs using an FHA loan to purchase a property.
What IS ALLOWED is the seller of the house agreeing to pay your closing costs in the real estate contract. Please do things above the board as to avoid some BIG problems down the road if anyone figures out you did what that goofball dipali** suggested.
Please don't listen to whoever that is advising you to commit mortgage fraud and risk jail time.
NO, it is not possible to finance your closing costs using an FHA loan to purchase a property.
What IS ALLOWED is the seller of the house agreeing to pay your closing costs in the real estate contract. Please do things above the board as to avoid some BIG problems down the road if anyone figures out you did what that goofball dipali** suggested.
Mr. Powell,
There are 3 ways your closing costs may be covered:
1) you can pay them at closing
2) The seller can pay them as negotiated in your contract
3) Your mortgage broker or lender can cover them with a slightly increased interest rate.
No, you cannot increase the loan amount to cover them, but you can have a credit issued that will cover them from your lender. With interest rates so low, a rate of 4.875% - 5% on your loan amount would easily cover all of your costs.
There are 3 ways your closing costs may be covered:
1) you can pay them at closing
2) The seller can pay them as negotiated in your contract
3) Your mortgage broker or lender can cover them with a slightly increased interest rate.
No, you cannot increase the loan amount to cover them, but you can have a credit issued that will cover them from your lender. With interest rates so low, a rate of 4.875% - 5% on your loan amount would easily cover all of your costs.
Hi netherton
" Please do things above the board as to avoid some BIG problems down the road if anyone figures out you did what that goofball dipali** suggested.
"
I never encouraged him to go for an unethical procedure, I just wanted to convey 'what is the reality in the market"!!
I neither got hurt by your comment nor I want to take my statement back.
Thanks
:arrow: :arrow: :arrow:
" Please do things above the board as to avoid some BIG problems down the road if anyone figures out you did what that goofball dipali** suggested.
"
I never encouraged him to go for an unethical procedure, I just wanted to convey 'what is the reality in the market"!!
I neither got hurt by your comment nor I want to take my statement back.
Thanks
:arrow: :arrow: :arrow:
yes i predict Dipali is right.....
One should evaluate after hearing all pros and cons and then only take the decisions which he/she will comfortable with.
So as a forum everyone in the forum will suggest you as per their views and share their knowledge but the decision making is his/her lookafter.
I guiss this should be basic thing in the forum that sharing your information that may be useful for him/her.
One should evaluate after hearing all pros and cons and then only take the decisions which he/she will comfortable with.
So as a forum everyone in the forum will suggest you as per their views and share their knowledge but the decision making is his/her lookafter.
I guiss this should be basic thing in the forum that sharing your information that may be useful for him/her.