Should I pay my fees out of pocket?

If you are purchasing a property, first lien mortgages typically do not permit fees to be included in the loan amount.  If you are refinancing, you can either pay the fees in advance or roll them into the closing costs.

For refinance loans only

  • If you have the funds, then it makes sense to consider paying fees out of pocket (for example, like you would pay a down payment on a car).   This allows you to have a lower monthly payment.
  • If you don’t have the extra funds, it makes sense to roll the fees into the closing costs of the loan.  The difference in payment and total cost of the loan is usually nominal.