Should I take Lender Credit?

Roku
Natu

Go to company page Roku

Natu
Mar 9 17 Comments

I recently signed SFH in Austin. I heard from one of my friends that we can ask for lender credits with a higher interest which can cover the closing costs and then move to a different bank to refinance for a lesser rate on the same day.

There is no pre payment penalty with the current lender. Can I do this or is there something that I am missing. Please help me.

TC: 270k
YOE: 6

17

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 TOP 17 Comments
  • Apple
    aWVt68

    Go to company page Apple

    aWVt68
    This is a very good option. Only downside is if rates increase when you try to refi and you may end up paying more. Also refi rates are typically not as good as primary rates. Usually a 0.125-9.25% delta which can be significant if it’s a large loan. But if rates drop then this strategy works out really well
    Mar 10 2
    • Roku
      Natu

      Go to company page Roku

      Natu
      OP
      I am planning refinance on the same day. Is it possible? Why would any lender would allow that? I am curious.
      Mar 10
    • Apple
      aWVt68

      Go to company page Apple

      aWVt68
      I have not heard of same day refinance. Usually you have the have possession of property and they will then need to do their appraisal and it would take 30 days or longer to close. And the rates would be up to 0.25% worse for a refi compared to regular purchase. So depends on the rates to see if it is worth it. Usually people refi when rates drop and it is worth the hassle to do it
      Mar 10
  • Amazon
    Amazon98

    Go to company page Amazon

    Amazon98
    You need to pay minimum 5k closing cost when you refinance.
    Mar 9 3
    • Amazon
      Amazon98

      Go to company page Amazon

      Amazon98
      I own multiple properties in Texas so I'm 100% sure. Best bet for you is to ask builder's lender to match the rate and see if they can add additional lender credits on top of that.
      Mar 9
    • Amazon
      Amazon98

      Go to company page Amazon

      Amazon98
      Why would builder pay closing costs for your refinance? Everytime you refinance, there are some fees that you need to pay from your pocket like loan origination fees, title fees, hoa charges, etc.
      Mar 9
  • Amazon
    ,πŸ¦—πŸ’©πŸš€

    Go to company page Amazon

    ,πŸ¦—πŸ’©πŸš€
    Don't you have to pay the closing cost again when you refinance with a different lender?
    Mar 9 3
  • Amazon
    LmQG78

    Go to company page Amazon

    LmQG78
    Yes, that's the trick
    Mar 9 2
  • Amazon / Data
    nply25

    Go to company page Amazon Data

    PRE
    Amazon
     nply25
    With interest rates rising every day not a good idea. Also you will have to pay for refinance closing cost, another appraisal fee, title transfer fee, etc.,
    Mar 9 1
    • Roku
      Natu

      Go to company page Roku

      Natu
      OP
      I will be getting 10k USD as lender credit. Will all the costs you mentioned be more than 10k?

      Even including the interest rates, I feel it’s more money to ignore. It’s like I am reducing 10k for free. But not sure if it’s a scam or legally possible to do it. If it is possible why isn’t everyone doing it?
      Mar 9