We received the following question for our December Monthly Connection:
Can you finance closing costs on HELOCs? They would be paid with the initial draw. Can we charge interest on the closing costs we finance?
While there is no federal prohibition against doing so, there could be some state law restrictions that you would want to look into. When HELOC closing costs will be paid using the initial draw to the line of credit, Regulation Z does have some pretty specific requirements as to how this should be disclosed on the periodic statement. Diane shed some light on this during the Memory Lane portion of the Monthly Connection:
Published
2025/12/18