Financing in 11427>Question Details

Isang35, Home Buyer in Queens, NY

Can anybody recommend a FHA lender who will pay closing costs if I take a higher interest rate?

Asked by Isang35, Queens, NY Mon Oct 17, 2011

I am interested in buying a home in Queens Village, NY and have been pre-approved for an FHA Loan. Initially, the lender I got the pre-approval from said I would be able to roll the closing costs into the loan at a higher rate but then when I went went to get an updated pre-approval he said that we would have to come up with all the closing costs. Not sure if we could get all the money for the closing costs.

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Annette Levinson’s answer
How did you get a preapproval without enough money to pay closing costs?
On a FHA mortgage the seller usually pays for the closing costs. If they don't pay for all the closing costs you can get a lenders credit with a higher rate (if you qualify). What does your realtor say about this? Check with them and if you have questions feel free to contact me.
0 votes Thank Flag Link Tue Oct 18, 2011
If you need loan officer recommendations, feel free to contact me directly.
0 votes Thank Flag Link Tue Oct 18, 2011
Isang35. The ability for a lender to role your closing cost into a higher interest rate will depend on where the market rates are at the time he/she locks your loan. It sounds as if at the time of your preapproval, the market was favorbale enough to cover your closing costs at a certain interest rate. However, market rates must have worsened (which they have been over the past 3 weeks) by the time you updated your preapproval. If so, and if your previous LO was fairly prciing you, going to a different lender will not change anything since we're all subject to the rise and fall of the same rate market, which is primarly dictated by the movement of the 10 year treasury bill/note.
0 votes Thank Flag Link Tue Oct 18, 2011
I do loans in NY and can pay your closing costs if you will accept a higher interest rate - they aren't "rolled in" to your loan amount but they are paid for us by giving you a "lender credit". The lender credit is generated by giving you a higher interest rate than what you qualify for if you didn't want the lender credit. I just priced it out on our rate system and as of today with a 660+ score we could give up to a 2.750% lender credit towards your costs (640-659 score it drops down to a max of 1.750% in lender credit, and 620-639 score a 0.750% max lender credit). It can be credited towards our lender fees, appraisal fees, insurance/tax escrow account, initial 1-year of insurance, pre-paid interest, attorney/title fees, recording fees & transfer/mortgage tax, pro-rated amounts owed to seller for taxes and pretty much anything else that is owed from you at closing (other than your down payment). We just did this for someone in Waywayanda, NY earlier this year and will be doing it again this month for someone in Binghamton, NY.

Our pre-approvals are pretty in-depth and require checking credit & reviewing your income & asset documentation + anything unique about your situation... even will go so far as to have it reviewed by an underwriter if needed.
0 votes Thank Flag Link Tue Oct 18, 2011
I can recommend several trusted lenders, any of whom will be happy to assist you with finding a suitable solution.

632-425-6150 or Gail@GailGladstone.com
Web Reference: http://GladstoneGroup.com
0 votes Thank Flag Link Mon Oct 17, 2011
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