Reducing closing costs: Seller Concessions, point write-off?
 

Hello,

I am purchasing a home (a loft in a multi-unit building) in Chicago,
IL, USA. I want to minimize my closing costs, which appear to be
roughly $4000 for a $235,000 property (including city-stamp-title tax,
attorney's fees, mortgage app fees, etc).

I understand I may have 2 options:

1) Seller Concessions: legitimate?

As described by

http://www.flinthomes.net/communityi...ncessions.html

it appears that I can finance my closing costs (with a limit of 3 to
6% of the property value, depending on how much down payment one
makes) in my mortgage. Is this all legit for my Chicago purchase? This
would be quite nice with rates as low as they are now (4.25% ARM I
have is almost free money), and I save most of my $4k out-of-pocking
closing expense.

2) Write-off closing costs that are hidden as mortgage/lending points?

I was told by one mortgage broker that closing costs can be
consolidated and labeled as mortgage/lending points, thus making them
income-tax deductible (and the closing costs are essentially paid by
the lender/mortgage broker). This sounds kind of fishy to me; why
would Uncle Sam so willingly give up all that money?

Another mortgage broker said that this move is strictly illegal. I'm
inclined to believe this 2nd broker.

Anybody have thoughts/knowledge on this?

Thanks for any help,
-Matt
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