Paying closing costs with a credit card?

Question

When purchasing an investment property, is it possible to pay the down payment and closing costs with a business credit card?

Charles Carillo · Answer

@Carolyn Boswell

I would not suggest investing in real estate if you do not have the funds for the down payment or closing costs. Investors should always have; a down payment, closing costs, money set aside for capital expenditures and a reserve fund. There are always going to be issues that arise and unforeseen expenses that seem to always popup.

Peter Mckernan · Answer

@Carolyn Boswell The lender needs to know, and trace the money from where the funds are coming from even with a credit card. The lender needs to know way before the closing table that you have enough to purchase the amount in your bank account (including Closing Costs), another issue that they'll would have even if you could do that is projecting DTI due to that high balance as soon as you close on your credit. Also, the lender will need to see not only the closing costs, and down payment in the account, they will vet you as a buyer with the reserves of 6 months as well that you'll need to have showing.

I agree with @Charles Carillo if you need to get the closing costs on your credit card to afford the property, or if you need it to afford the rehab costs to be cash out of pocket, or whatever it maybe; you'll need to save some more to be ready for it.

Couple of tricks to save on closing costs: 1. Increase the offer to above asking and ask for the amount in recurring/non-recurring closing costs back from seller at close 2. Increase the interest rate to a higher percentage, and have lender credit you for more (i.e. I just bought a rental, bumped the interest rate to 3.625% instead of 3.25% and got $3,000 back from lender since I know I will be refinancing in 6 months) 3. Go in on the property with a partner that can cover the closing costs and other costs so you are not over extending

George Mastrosavas · Answer

CASH IS KING. DEBT IS DUMB.

Theresa Harris · Answer

If you don't have the money saved up for closing and down payment, don't buy a property.  If you have a dividends card where you get cash back for purchases and pay it off in full right away, then that is different.

Amy D. · Answer

@Carolyn Boswell I don't see why not. If you can get a loan for your DP, you should be able charge your DP. Seems like a good idea, especially if you have a travel reward or cash back type card. Or especially if you can transfer to a 0% CC until you refi.

Sarah Brown · Answer

I don't believe you are allowed to pay with a credit card.  I think it has to be certified funds.

Paying closing costs with a credit card?

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