Financing without closing costs!!!

[Eddy Wehbe]

Looking for someone to finance some properties in order to purchase new ones. Sometime ago, I heard about a Broker who would finance and he would pay for the closing costs. Any suggestions? any catch in this process?

[Stephanie P.]

@Eddy Wehbe

Here's how it works.

When a lender is quoting rates, they find out what's important to the borrower (at least they should).  If it's low monthly payment, they find the lowest rate.  If it's low to no closing costs, they find a rate that will provide yield spread and use that yield spread to pay the closing costs.

Conventional lenders get a rate range.  It ranges from a rate in the 2's to a rate in the high 4's.  Rates in the 2's cost the borrower points and rates in the 4's allow for lender credit toward closing costs.

Pick a higher rate and let the lender pay your closing costs.  With rates as low as they are, it's not a bad strategy.

Stephanie