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@Anonymous wrote:
Im first time home buyer and I have 10K for down payment but no money for closing costs.
Where can I get a loan with no or minimum closings costs?
My budget is 220K and score 770.
Sellers generally provide some closing costs if you ask for it. If buying a used home, make the closing costs request part of your offer. If buying new construction, asl the builder about how much closing costs it is offering.
^^^Yes, if you don't have the funds then try to get the funds for closing from the seller. There is one more option: the lender can pay some or all of your costs, but you end up having to pay a higher interest rate if you choose this option. It is better to do it like EZ states above - get it from the seller (in writing) at the time of your offer & subsequent contract.
I am using a down payment assistance grant for my down payment and I was able to get the seller to pay 5k of my closing costs by offering 5k above list price. In the Seattle market where I live, that's the only way to get them to "pay" the closing costs. My estimate shows me getting almost 2k back of my 4k earnest money deposit at closing after their 5k is applied. So, while that isn't zero closing costs, it's only about 2k out of pocket on a 430k home. Plus, of course, the inspection and appraisal, which cost me another 1k out of pocket.
If you have the 10k down payment, but zero for closing, remember the appraisal and inspection are up-front costs. And then see if you can get the seller to pay closing costs. I probably could've gotten the remaining 2k out of them by increasing my offer by 2k.
@Anonymous wrote:I am using a down payment assistance grant for my down payment and I was able to get the seller to pay 5k of my closing costs by offering 5k above list price. In the Seattle market where I live, that's the only way to get them to "pay" the closing costs. My estimate shows me getting almost 2k back of my 4k earnest money deposit at closing after their 5k is applied. So, while that isn't zero closing costs, it's only about 2k out of pocket on a 430k home. Plus, of course, the inspection and appraisal, which cost me another 1k out of pocket.
If you have the 10k down payment, but zero for closing, remember the appraisal and inspection are up-front costs. And then see if you can get the seller to pay closing costs. I probably could've gotten the remaining 2k out of them by increasing my offer by 2k.
A possible risk with this approach is that the property may or may not appraise at the higher price...then what? The lender will use the lower of the appraised price or the purchase price.
@ezdriver wrote:
@Anonymous wrote:I am using a down payment assistance grant for my down payment and I was able to get the seller to pay 5k of my closing costs by offering 5k above list price. In the Seattle market where I live, that's the only way to get them to "pay" the closing costs. My estimate shows me getting almost 2k back of my 4k earnest money deposit at closing after their 5k is applied. So, while that isn't zero closing costs, it's only about 2k out of pocket on a 430k home. Plus, of course, the inspection and appraisal, which cost me another 1k out of pocket.
If you have the 10k down payment, but zero for closing, remember the appraisal and inspection are up-front costs. And then see if you can get the seller to pay closing costs. I probably could've gotten the remaining 2k out of them by increasing my offer by 2k.
A possible risk with this approach is that the property may or may not appraise at the higher price...then what? The lender will use the lower of the appraised price or the purchase price.
True, but around here everything is going for 50-150k above asking. I was lucky to even find a house with some issues that discouraged other buyers. Somewhat ironically, they were all issues that had to be fixed to even allow a buyer to be financed so here I am with a house with all new heating and a bunch of new electrical just installed that would have generated a bidding war if people had realized the seller had to do the work anyway...
But, yes, of course it could pose a problem for the appraisal, but we are in an insane market so it's likely the comps would support much higher than what I actually offered (even with the 5k bump).
Keep in mind that the money due at closing is not limited to just the finance company's costs and fees, but you're most likely going to have to pay several months' worth of real estate taxes and an entire year's worth of homeowner's insurance, into escrow. If there's a homeowner's association, there may be an "entry fee", plus at least several month's worth of HOA fees that will be due at closing. Those sorts of things aren't covered by those lenders that advertise "no closing costs" loans.
Ask the seller to pay for the closing costs. In the house we just bought - we offered list price, but asked for 5500 in closing costs - which covered EVERYTHING we needed, outside of our down payment.
We closed one year ago. We had $10k cash and we split closing costs with the seller plus asked for 1 year home warranty. Closing costs included lender fees, taxes, a year pmi up front, home owners insurance blah blah blah etc. Everything came out of the $10k and what was left applied to the down payment. It was a little bit of a downer on one hand but we were in our own home so we were happy.
The one thing I was thankful we insisted on was the home warranty. Our upstairs air unit went out in September and one week before it was scheduled to end - last week , the dishwasher flooded our kitchen. The warranty saved us quite a bit of money. We bought a really nice house and thought we really wouldn't need the warranty but things happen.
Good luck!