Roll Closing Costs in to Mortgage?

[Ray I.]

Hello,

I am currently in the process of buying a SFR, and I noticed the closing costs were higher than I had anticipated. My lender said there is no way to roll in the closing costs, but we can ask for a maximum of 2% concessions from the seller to help cover some of the costs. Here are my questions:

1.) Is there a way to roll in the closing costs?

2.) Does this vary depending on the lender?

[Chris Mason]

Hi @Ray I.,

You and your lender should have spoken about this back at the preapproval stage, when you were shown closing cost numbers that you "need to see," not rosey numbers that you "want to see."

Here is how you roll closing costs into mortgage, with example numbers that are nice and round.

• See property that would be a great deal for $500k, meaning it would likely appraise for at least $525k if that's the number on a purchase contract.
• Write the offer for $510k, asking for a seller credit for $10k. So, really, it's a $500k net offer.
• Appraisal comes in at or above $510k.
• Effectively you just financed most of that $10k in closing costs. 
• ???
• Profit (actually, you're paying interest on that extra amount you are in debt, but you kept money in your pocket today that you can still deploy as capital tomorrow, so you only profit if your ROI on that money is greater than your interest rate).

Note that maximum interested party contributions still apply. Seller credit cannot exceed total closing costs or the % associated with the loan program. $10k on a $30k deal obviously ain't gonna happen.