Can we roll closing costs into

the loan on a purchase?

This is one of the most common misconceptions in

the mortgage industry. You may have heard a

friend or family member mention they were able to

roll their closing costs into their mortgage loan;

however this is not entirely true.

What this really means is that they were able to

secure either a seller credit, which is when the

seller agrees to pay the costs because they sold

the house at more than the market value, or lender credit, which is when a lender will pay the closing costs in exchange for a higher interest rate.

 

See below:

  • Fannie Mae (Conventional): The only way to not pay your closing costs out of pocket would be to include a seller credit as a contingency of your offer or speak to your loan officer about a lender credit.

  • Freddie Mac (Conventional): The only way to not pay your closing costs out of pocket would be to include a seller credit as a contingency of your offer or speak to your loan officer about a lender credit.

  • FHA: The only way to not pay your closing costs out of pocket would be to include a seller credit as a contingency of your offer or speak to your loan officer about a lender credit.

  • USDA: You can roll the closing costs into your loan only if the house appraises above the purchase price.

  • VA: The only way to not pay your closing costs out of pocket would be to include a seller credit as a contingency of your offer or speak to your loan officer about a lender credit.

CENTER POINT MORTGAGE, INC

1450 N Tustin Ave #223, Santa Ana, CA 92705

Phone 888.653.7010

Fax 949.421.6474

California Broker # 01494257

NMLS # 1216434

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