Yes, but not in the way most home buyers would think. Let’s say for example you agree to purchase a house for $450,000 and your putting down 20%, $90,000 so the amount you’re looking to finances $360,000. There is not a way to simply increase the loan amount for covering closing costs.

Seller Credit-this can be accomplished by inflating the purchase price to cover the amount needed for closing costs. The risk here is that the house doesn’t appraise and then the seller would either have to take a lower net or you the buyer would have to figure out another way to come up with the cash needed for closing costs. Looking at our purchase price example, by increasing the purchase price $10,000to %460,000, you’d only need an extra $2,000 in down payment for the seller to pay the closing costs for you. Essentially you are financing the closing costs because financing is based upon the value of the property and the value of the property dictates how much funds are available for paying  items such as closing costs.

Lender Credit-lender credit is accomplished by inflating the interest rate so the lender has enough room to provide a credit for closing costs. *Note- in a situation like this, the cost of the money is higher because the associated interest rate with needing the lender credit is higher. In other words, if cash to close its tight, financing closing costs can be  accomplished at the cost of paying more interest over the  term of the loan.

If you are trying to buy house or want to see what you qualify for, start by getting a complementary prequalification from scott@sonomacountymortgages. today!