Question about down payment and closing costs

[Day]

DH and I are looking to close soon on our first home. Closing costs and down payment are a little more than we had anticipated because we no longer qualify for a program that would have paid all closing costs. However, we have enough to cover the amount in CDs. We don't want to cash the CDs in before they mature and we know we would pay the loan off early, as we usually do.

 

If we got a loan on the CD to cover the closing costs, would that be a problem?

 

TIA!

[Operation_Home_Ownership]

A loan on your own money? Dont you mean cash it out?

[gerray]

No, they would borrow against the CD.... say the CD pays 3% but if they cash it out early they will pay a penalty... The Bank will "lend' them their money back at a low rate so they don't have to pay the penalty etc...

[gerray]

To add to that, I don't think it would be a problem. FHA and other companies allow the use of a 401k loan to be used as a down payment, so I don't see how that would be any different than borrowing against your own assets.

[Day]

talked to loan officer today and she said we could do it. so, yay! looking to close soon

[WFO]

A loan on your own money?

 

Yeah, banks will do that. Depending on the bank will determine the spread over the interest they are paying you. My bank would do 2% over.