Whether you are buying your first home or refinancing your current home, closing on a home can be overwhelming when considering all of the closing costs. Here are a few things to consider to help prepare you for closing.
Include Closing Cost When You Refinance
If you are refinancing your home, it is possible to include closing costs in the loan amount.
However, including closing costs when refinancing is possible only if it doesn’t impact your loan-to-value or debt-to-income ratio.
Keep in mind, that the higher the LTV, the higher the interest rate. For instance, if your loan amount, including closing costs and escrow, goes over 90% of the value of your home, then the interest rate for which you qualify will be higher than the one that you would qualify for with an LTV of 80%. In some cases you may not qualify for a higher LTV, depending upon credit scores, type of property, debt to income ratios, etc.
In summary, you may be able to reduce your out-of-pocket costs and finance them as part of the mortgage, but you should consult with a loan counselor. They can help you assess whether the larger payment amount and possibly higher interest rate are worthwhile for your particular situation. Depending on how long you’ve had your home and your mortgage, current interest rates may allow you to finance your closing costs, and even take out additional cash with a new monthly payment less than your existing payment. We can help you evaluate all of your options!
If you are purchasing a home you will not be able to include closing costs in the loan amount. However, you should speak with your real estate agent about the possibility of negotiation with the seller to pay some or all of your closing costs. Many mortgage programs will allow this and many sellers are willing to pay closing costs to facilitate the sale of their home.
Marimark Mortgage is based in Tampa, Florida, and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.
We specialize in mortgages for first-time homebuyers, conventional home mortgages, refinance loans, reverse mortgages, and FHA, VA, and USDA mortgage options. In addition, we’ve worked extensively with cash-out refinancing and help clients to lower their monthly mortgage payments.
To get started with a mortgage to buy your next home, please fill out our Quick Mortgage Application or contact us.