Let's say you're about to buy another home. Let's say you've used the same lender many times in the past. Let's say I review the pre-approval information and ask "So, what's going on with closing costs?" I wonder how much the lender has quoted. Wonder if the buyer is aware of everything related to their down payment and closing costs. I have to help them with everything, right?
Well, I probably don't have to, but I sure don't want my client upset when something falls apart because I didn't dig a bit deeper.
I try to let the lender explain everything, let them do what I consider to be 'their' job. But, I definitely stick my nose in when it's just not clear enough. Or I can tell that my client, the one I've sworn to do my fiduciary responsibility to, doesn't quite know what's the real skinny.
So, my lovely little nose sticks in, very politely mind you, to find out exactly how those closing costs are getting paid.
And, the lender very clearly states exactly how it's going down. Buyers rate is bumped up a bit to get a credit back to help cover some of those costs.
Now, that's a pretty typical way for a lender to 'cover' closing costs. But, what my client didn't realize is that the rate was pushed up to get the credit to get the 'cover' offered by their lender.
I'm not saying there is anything wrong with the scenario. Just that the client wasn't aware of how it was going down. They were under the impression it was more of a nice credit directly from their lender, not the bumping up of interest rate to do so.