Roll In

DEFINITION of 'Roll In'

A term which refers to including loan costs into the initial principal balance of a loan. This is a common practice by mortgage borrowers who do not have funds available, or who do not want to pay loan costs out of pocket. While most loan costs (lender fees) may be included into a mortgage balance, "prepaids" (ex. per diem interest) cannot.

"Roll in" is used interchangeably with "to roll" or "rolling". For example, a borrower could say "I'm broke, I want to roll in my loan costs into the loan balance", or "I'm broke, I want to roll my loan costs into the loan balance", or even "I'm broke, and I'm rolling my loan costs into the loan balance."

BREAKING DOWN 'Roll In'

To roll in costs into a mortgage balance is an opportunity-cost decision. For example, if the costs associated with refinancing a mortgage are $4,000, and the borrower has $4,000 available that they could use to pay those costs, the borrower should make the decision based on the economic (or utility) benefits and losses. By not using the $4,000 to pay loan costs, and instead rolling in the $4,000 into the loan balance, the borrower would have increased not only the total balance of the loan, but also the amount of interest that will be paid over the life of the mortgage. A thorough analysis should be completed before making these major decisions.

RELATED TERMS
  1. 100% Mortgage

    A mortgage loan in which the borrower receives a loan amount ...
  2. Refinance

    1. When a business or person revises a payment schedule for repaying ...
  3. Standing Loan

    A type of loan where payments are made of interest only. Repayment ...
  4. Combination Loan

    1. A transaction consisting of two separate loans for the same ...
  5. Renegotiated Loan

    The result of an agreement between a borrower and a lender to ...
  6. Home-Equity Loan

    A consumer loan secured by a second mortgage, allowing home owners ...
Related Articles
  1. Personal Finance

    Financing Basics For First-Time Homebuyers

    If you're looking to get your first mortgage, there are many financing options available.
  2. Personal Finance

    Reduce Interest With An All-In-One Mortgage

    "Offset" mortgages combine a checking account, home-equity loan and mortgage into one account.
  3. Investing

    Understanding Term Loans

    A loan from a bank for a specific amount that has a specified repayment schedule and a floating interest rate.
  4. Personal Finance

    The 4 Worst Ways To Borrow Money

    While there are less risky places from which to borrow, there are also predatory lenders who can make your financial situation worse than it was to begin with.
  5. Managing Wealth

    When Are Personal Loans a Good Idea?

    You never want to borrow money for frivolous reasons, but these five circumstances might warrant it.
  6. Managing Wealth

    Commercial Real Estate Loans

    Obtaining a commercial real estate loan is quite different from borrowing for residential real estate. Here's what to expect and how to get what you need.
  7. Retirement

    The Reverse Mortgage: A Retirement Tool

    Discover another way to fund your retirement without having to make payments on a loan.
  8. Personal Finance

    Interest-Only Mortgages: Home Free Or Homeless?

    These loans can be beneficial, but for many borrowers, they present a financial trap.
  9. Personal Finance

    Personal Loans vs. Car Loans

    How to tell whether a personal loan or a car loan is better for you.
  10. Investing

    Score a Cheap Mortgage

    Hidden costs can create what looks like a good deal. Find out how to find the best mortgage possible.
RELATED FAQS
  1. Which loan should I pay off first?

    I have a $33,000 mortgage at 4.5% interest due in June 2019. I also have $627 in monthly car loan payments for loans that ... Read Answer >>
  2. Why is there a wide margin in interest and a narrow margin in total amount paid on ...

    I am refinancing my home with payoff amount of $107,000 at current rate of 6.0% to a new loan value of $134,300 at 3.125%. ... Read Answer >>
  3. How do I figure out my student loan fixed annual rate and APR?

    I'm trying to figure out my student loan rates. I've never taken out a loan before. It says 4.95% fixed annual ... Read Answer >>
  4. Are secured personal loans better than unsecured loans?

    Read about the differences between secured loans and unsecured loans and how they are used. Learn about forms of collateral ... Read Answer >>
  5. What is the difference between a PMI (primary mortgage insurance) loan and a Federal ...

    Understand the difference between a conventional mortgage that requires primary mortgage insurance and a Federal Housing ... Read Answer >>
  6. What are the differences between delinquency and default?

    Find out more about loan delinquency, loan default, and the difference between a loan borrower defaulting and being delinquent ... Read Answer >>
Trading Center