Can I roll in my closing costs when I refinance?
Yes. Rolling closing costs into your new loan is known as a no-cost refinance and may be a good strategy if your short-term priority is to keep more cash in your pocket. There are two key ways to bake upfront costs into your new loan:
The first is by taking lender credits. In exchange for a higher interest rate on your loan, your lender will give you credits to cover your upfront closing costs. The second is by applying your closing costs to the principal of your new loan amount. This means your interest payments will be calculated based on this higher number.
While each of these strategies can offer financial advantages, you are ultimately delaying payment on your closing costs rather than avoiding them altogether. Make sure you understand the overall impact before you decide to do a no-cost refinance.