Sorry for wearying you with yet another question about tax consequences of refinancing, but I'm very grateful for the answers I get from this group.
The lender's latest plan, which makes sense given when I plan to sell, is to offer me an above-market interest rate (though still less than I'm paying now) and absorb all the closing costs, about $3500, via a "lender contribution". The closing costs include things like mortgage tax and title search that involve real outlays by the bank, as well as fake charges like "processing fee" and "underwriting fee".
As I understand things, there are no income-tax consequences of that contribution when I take out the mortgage, since the closing costs would not have been deductible anyway. Is that correct?
And will that lender contribution have any impact on my basis when I sell the house?
Many thanks!