So in other words, you want to roll the closing costs into the financing and have the bank finance the entire sales price (100% LTV) but have them think they are only financing a portion of it.
Questions similar to this have been asked many times.
The answer is if you intentionally deceive a lender by altering their HUD-1 statement to reflect the transaction differently than what is really going on, it is FRAUD and the buyer, seller, realtor, and title company could get nailed with criminal and civil penalties. Also, most of the time you will have to sign a document that says that buyer and seller don’t have any off the record side deals going on. Lenders know that some people are trying to scam them in this way.
What are the ramifications(tax, legal or otherwise) when asking a seller to simply raise the selling price by the cost of the buyer’s closing costs/down payment when obtaining traditional mortgage? The seller would apply the sum as a credit to the buyer for ficticious repairs or whatever. This alows the buyer to close with no money down.
What are the pros and cons for the buyer and the seller?
As long as the appraisal value satifies the puchase price and additional expenses you like to finance, you can lump them together and write the new purchase price as you suggested. I think this is gone commonly
Tim