Rolling Your Closing Costs Into the Mortgage

Reader Question: How can I include closing costs in the price of the house?

In the current buyer's market, it is possible to ask the sellers to pay your portion of the closing costs. Given the current status of our economy, many homes are on the market for far longer than the seller anticipated, and many sellers are in no position to wait for a full-price offer with no conditions.

Talk to your real estate professional about including that in your purchase offer. He our she can advise you as to whether or not it makes sense in your particular situation. However, if you are not able to get the closing costs paid as part of your purchase offer, you can speak to your mortgage company about rolling the closing costs into the amount financed to purchase the home.

There are many variables in this scenario, such as how much your down payment is and the percentage of the sales price being financed. In the most recent real estate "boom," many buyers were not able to come up with any money down and did not have money to cover the closing costs. Lenders were willing to finance over 100% of the purchase price of the home, which allowed the buyer to finance the closing costs as part of their monthly mortgage.

But as we all know, times have changed and credit criteria have tightened. So your best bet in this scenario would be to discuss the matter with your mortgage lender.