CLOSING COST OPTIONS
When financing a home, you will have many different options regarding the closing costs. While you always have the option to pay your costs directly out of your pocket, you have other choices including:
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If you are refinancing, you always have the option of rolling the cost into your final loan, thereby creating a no out-of-pocket refinance. This is the most common form of refinancing, and this does not affect the interest rate.
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In certain circumstances, such as if you are not planning on being in the home for a long period of time (2-3 years), a lender paid refinance makes sense. A "lender-paid" refinance is where the lender pays part or all of your closing costs in exchange for you paying a higher interest rate, usually 1/2% to 3/4% higher than the average rate. If your current rate is higher than the lender paid rate, and you do not plan on being in the home for longer than the payback period (monthly savings from the lower rate divided by the cost to refinance), then it may be an option to consider.
However you want to pay for your closing costs is up to you. At Advisor Funding, we give you all of your optioons, and let you decide what is best.
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