Can you finance closing costs on a home loan?

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I am looking at buying my first home for about 90K. I know I need 3.5% for a down payment. Do I also have to pay for closing costs or can I finance them in the mortgage?

What other costs do I have to pay up front?


  1. Reply
    April 30, 2011 at 12:59 am

    No you cannot finance them. You also may be charged prorated taxes, heating oil in the tank, registration and transfer fees for the deed and Fed Ex charges. You need money for deposits with the Utility Companies

  2. Reply
    Glenn S
    April 30, 2011 at 1:17 am

    Mostly No….except with a FHA loan most buyers do finance their MMI (mortgage insurance).

    What most buyers are doing in my area is asking the sellers to pay 6% of the sales price in your closing costs. For a $ 90,000 purchase that would be $ 5400. Especially REO banks are often paying these closing costs for the buyer. What some are doing is just adding these costs onto the purchase price, so in reality you would be financing them. But the property must appraise at the higher sales price and it will slightly bump up the amount needed for a down payment.


    But technically no, you can’t finance closing costs, but in practice it is done all the time. Again, FHA, Fannie-Mae, and Freddie-Mac will allow the sellers to pay a maximum of 6% of the sales price of buyers closing costs.

  3. Reply
    real estate guy
    April 30, 2011 at 1:56 am

    The answer is yes and no.

    The lender can pay your closing costs. However, to cover these costs, the lender will charge a higher interest rate.

    The seller can pay your closing costs. This means that you have to either make an offer for them to pay or increase the house price by the closing amount and have the contract written at the higher price.

  4. Reply
    Leo F
    April 30, 2011 at 2:00 am

    No you can not finance closing costs or down payment. You can get the seller to pay for closing, if they want to.

  5. Reply
    April 30, 2011 at 2:37 am

    FHA loans require that you pay all closing costs. They can NOT be incorporated within the loan.

    Costs on a 90K home will run you between 2-4k….depending mostly on your taxes and homeowners insurance.

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