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Which Is Better: Higher Mortgage Or Paying Closing Costs?

posted by Stephen Katz @ 4:36 PM
Wednesday, May 24, 2017

Today we are going to discuss whether it is better to pay the closing costs in cash upfront or to take out a higher home loan. The difference could cost you thousands.

It’s very common for sellers to be asked to pay closing costs by the buyers, so keep this in mind. Let’s say you want to buy a home that’s listed at $100,000 and have made an offer of $97,000. If you want the seller to cover those closing costs, which could be up to $3,000 or more, you may need to come up on your offer a little bit. When it comes to your mortgage, a difference of $3,000 isn’t that big. It’s a few dollars a month on your payment. However, that $3,000 in closing costs is cash that comes immediately out of your pocket.

I’m not saying you have to pay full price just to get your closing costs covered, but if you are going to have a trade off of a few thousand on your mortgage or a few thousand more in cash in your pocket, it’s smarter for you as a buyer to keep that cash in your bank account than it will be to come up a few thousand on your mortgage. If you can have those closing costs set aside for a rainy day, you’ll be happy to have it when something inevitably goes wrong in your home.

If you have any more questions for us, or are thinking about buying yourself, give us a call or send us an email. We look forward to hearing from you!


Stephen Katz

(770) 309-0939 (direct) or (866) 742-8400 -- For the past 18 years, Stephen Katz has built a successful business almost entirely on referrals. As your mortgage consultant throughout the home loan process, Stephen will explain the pros and cons of all available mortgage programs and help you choose the financing option that is best suited to your needs. Throughout the loan process, he will keep you informed and will respond quickly to your requests with answers and solutions. Consistently a top producer, Stephen is a Mortgage Bankers Association "Diamond" Award winner, a Georgia Mortgage "Top Gun" and has closed almost half a billion dollars in loans. Put his knowledge and experience to work for you!

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