Finance closing costs...or put less down and pay closing costs (loan, loan)

[Chickrae]

Maybe this question has been answered before but didn't search all the threads.
Here is the situation. Have X amount to put down on the house. We thought the seller might pay closing costs but they can't. Closing costs are 5,000 approx. Should we put 5,000 less down on house and pay closing costs outright or increase the loan 5,000 to cover closing costs? We are putting 50% down and in three years will pay the rest off. So we won't be financing the 5,000 for 30 years.
I asked our mortgage person and they said it doesn't matter if we are paying the home off.
I just want the CD input....since everyone is always so helpful on here

[chet everett]

You would be CRAZY to have 50% down and not look HARD at paying down the rate. Huge potential for saving and far more flexibility if you decide not to pay off in 3 years -- plans change!

Do the math with your tax picture too -- deductibility is the key is situations like yours.

[Chickrae]

Ok well we got a good rate, 5.0 and payments are low and I guess we could pay points to get it lower but I was just asking what would be a better way to pay closing costs?

[SmartMoney]

I agree with your lender, the 5K, if to be paid off so soon, is minor.

I do think w/ money being so cheap, you should review your payoff plans with a Certified Financial Planner that is not compensated based upon what you invest. Find someone to hire by paying a flat fee.

[Chickrae]

Thanks for the info. We will be selling the house we are living in now when husband retires in 3 years and using that money to pay off the house we are buying. I do wonder about paying off the house and not having that tax write off. We probably do need to consult a financial planner. I really don't want to invest in any stocks right now. I am pretty conservative and plus I have lost alot of money this past year in the stocks I do have.