Don’t Have Money For Closing Costs? Here’s How You Get It. June 24, 2007
Posted by Patti Shawgo in First Time Home Buyers, Interesting Stuff, Mortgage Stuff, Real Estate.trackback
The number one thing I come across as a loan officer is that first time home buyers rarely have the funds for closing costs, or they may have the funds but they are tied up in IRA’s and 401k’s which I wouldn’t recommend tapping into unless absolutely necessary.
100% financing is widely available, but this does not cover the multitude of little fees that add up. Standard Closing Costs include things like: Transfer Taxes, Title Insurance, Appraisal cost, Home Owner’s Insurance, and certain “pre-paids” like your property taxes, a certain amount of which MUST be paid at closing.
It really is possible to get into a home for very little money out of pocket. You are going to need some money for things like the deposit to the seller and home inspection, but here’s how you get money for all that other stuff:
1. Seller Concessions: The market has changed! You, the buyer, are more in control than ever. A seller concession means the seller will credit you a certain percentage of the sales price at closing. Most loans will allow up to 3% of the sales price as a seller credit. On a $200,000 property that would be $6000.
2. Down Payment Assistance Programs: I work with them all! You can make up to $100,000 and still qualify for certain programs. These programs offer money towards closing and low interest rates. You are able to combine these programs with seller concessions.
3. Loans that allow you to borrow more than 100% of the sales price. There are some loan programs that will allow you to borrow up to 103% or even 105% of the sales price. I do not recommend this way to get money for closing unless you absolutely have to. The rates on these loans tend to be a little higher, plus you are borrowing more than what your new property is worth and that’s never a good idea! This is generally how those “no closing cost” programs you hear about work. Raise the interest rate slightly and credit back to you, but you shouldn’t pay a higher rate unless you have to.
How can I get a loan of 40,000.00, which include the balance of down payment and closing withing 30 days
Email me.
patriciacshawgo@gmail.com
I NEED MONEY TO COVER MY CLOSING COST,FAMILY & FRINDS DI NOT HAVE AY MONEY
WHAT CAN I DO?
Hello Jean,
I am a part owner in a real estate co. and the best advice to give to you is to have an agent who is trained in these matters and also who is able to think of the questions most people do not think of in everyday life. For example: if you are a baby sitter, it’s a good guess you never think of home loans or how to write up a real estate contract. Right? To help you getstarted though would be to ask if the seller’s are willing to pay some or even all closing cost depending on your offer price of a piece of property. You could even check with the housing and urban development office for a city grant program in your city. They usually forgive $1,000 for every year that you live on the property but usually that amount is no more than $5,000. Check with your lender as well for certain other programs to roll into your loan to help with closing cost too, afterall that’s what they are being paid for. Right? I hope this helps you get started and good luck.
I did not sell my existing home so i am renting it out but i do not have the closing cost money for the new home. What should i do or is there any help for me and my family to borrow the money for closing?I need at least $50,000.
I have the same question as #5. Please help.
To #5 and 6 Unfortunately, no, if you are renting out your existing property but don’t have the 3.5% minimum that would be required for FHA (or whatever loan program you are getting), there aren’t really any down payment assistance programs in place *right now* that would help with that. If seller funded down payment assistance (like Nehemiah & Ameridream) programs come back, that kind of thing would help you out.
Also, if you do have any equity in your existing home, it might be possible to get a home equity line of credit to get funds for a down payment. You’d want to do this before you are renting out your house.
Hope that helps!
My name is Yolanda Richardson I am a single parent with two kids and i’m tryen to get money for my closing cost and i should be closing within two weeks is there any help for me.
I have a usda loan and my house is worth 131,000 and usda give my 138,000 can i use the remaining loan to pay for my closing cost (PLEASE HELP)
I’m a first time home buyer. Isn’t there any programs to help with closing cost? I’m was approved for a fha loan with a 3% conssesion
I’m a first time Home Buyer My name is Lonnie. I a retired disabled male who presently lives in New York. I went to Florida April14, 2009 for my daughter’s graduation. On April 23, 2009 I saw the house of my dream in Poinciana FL. I had been pre approved some months earlier. To make sure I called my Lender. They confirmed I was pre approved 30,000 more than the sale price. The house is a short sale for 132,000. I was verbally told by the Lender all I needed to come up with is 8,000 for closing June 12, 2009 I was told the seller Bank had approved the sale of the House and we need to go to closing by June 30Th 2009. I have the 8,000. The Lender now wants me to come up with 17,500.00 …. All other requirements have been met. What can I do about closing cost in such a short period of time.
My name Dora Pryor my hme was recently lost due to foreclosure my father is buying my home with his V. A. loan we need help with closing cost can you reference me to some that will help us. I have been trying to take care of my parents so only my husband was working an I am on disability my Father is 82yrs and my mother is 80 yrs old my mother also had a massive stroke can you please give me some advise on how we can get the money for the closing cost. Thank you
and my god bless you.