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#1085823 - 11/21/08 04:10 PM closing fees
gunches Offline
100 Club
Joined: Dec 2005
Posts: 210
We are doing a real estate loan, and charging the bank's normal fees, some of which are finance charges. The seller is paying all closing fees. My question is - when we do our loan documents, do these fees still affect the APR even though the seller is paying them? I say yes, loan officer says no.

We are also including a promo of $300 off closing costs. Does this affect the APR at all?

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#1085847 - 11/21/08 04:23 PM Re: closing fees gunches
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,645
Bloomington, IN
If the borrower is contractually liable to the bank to pay the closing fees then they are finance charges regardless who pays them for the borrower. If the seller is contractually liable to pay the fees, and the borrower has no liability to the bank to pay them, then the fees paid by the seller would be exempt.

The $300 closing credit should be shown in the 200 series of the HUD Settlement Statement. It would not affect the APR.
The opinions expressed are mine and they are not to be taken as legal advice.

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