SO I am buying a house for the first time I have no money on hand to pay closing costs I am wondering what is involved on the buyers side of the closing costs I havnt started the process yet b/c i cant if closing costs are too high?
- loanmasteroneLv 74 years agoFavorite Answer
Normally a buyer would be required to pay recurring closing cost. Recurring closing cost would be considered taxes and insurance.
Why would a seller want to pay your insurance and taxes? If you are required to have an escrow or impound account you would be required to set this account account up which might require a few hundred dollars. A seller would not be interested in funding your escrow account.
You would also be required to pay points and fees for the mortgage loan you would be approved for. Why would a seller want to pay for your getting a mortgage loan? There are some mortgage loans where you are able to be approved for a mortgage loan and the fees and points would be included in the mortgage loan. If you are approved for this type of mortgage loan your interest rate would be higher.
You would also be required to have a down payment. If you are getting approved for a FHA mortgage loan, you would need a minimum of 3.5% as a down payment in addition to your closing cost.
If you have a 401 K fund offered by your employer, you might want check with your 401K manager to see if you are allowed to get a loan to cover the down payment and closing cost of your mortgage loan.
If you have no means of paying the down payment and closing cost to include the payment of an appraisal and inspection, you might not be successful in closing this transaction
You would also want to make sure your bank account is not increased by a large amount money. This would not work as any funds you would use in this purchase transaction would have to be in your account for 3 months or more before you are able to use it in the purchase of a house. This is called seasoned funds.
I hope this has been of some benefit to you, good luck.
- glennLv 74 years ago
Talk to your mortgage company. Pick a local competent experienced loan officer. Ask them if they have a way to finance in the closing costs. If they do not then ask how much they will be. Then on any offer- ask the seller to pay for those (doing this second choice will make your offer not as good as someone that pays their own costs but in some markets sellers are willing to do this).
- coraannLv 74 years ago
Yes, your realtor will be happy to sell you a house. However, he will not contribute to the down
payment or the closing costs.
You must have a mortgage approval, enough income to pay it, plus property taxes,and no other debt.
You must at least 5% of a down payment and closing costs of between $3000. - $ 6000. to pay lawyer's
fees, closing costs,inspection,insurance and utilities deposits. This must be your own saved money.Source(s): Knowledge.
- AngeliqueLv 54 years ago
There are no closing cost options offered by some banks. Some cities have first time home buyer programs to help people that ordinarily couldn't buy a home. It requires some work on your part - financial counseling, classes, etc.
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- Anonymous4 years ago
No cash? No house. It's just that simple.
Even if you can get the seller to pay closing costs, you're still going to need cash. "Closing costs" are only PART of the funds needed at settlement, usually a SMALL part.
- SlickterpLv 74 years ago
You won't even get approved for a loan if you don't have enough money for down payment and closing costs. Closing costs are several thousand dollars, plus you need a down payment, at least 3.5% down for FHA.
- ALv 74 years ago
You will need to have a down payment and money for closing costs. You can get hit with other costs during closing such as being charged for the 'oil in the tank' Propane in the tanks that is prepaid,' any prepaid property taxes, and you will have to pay for homeowners insurance and possibly GAP insurance. You need to save up the money for closing, if you can't then you probably can't afford a house
- Beverly SLv 74 years ago
Most people ask for the seller to pay closing costs when they write the offer. You will however need a down payment unless you are a Veteran.
- Marie KLv 74 years ago
So you ask them to accept a slightly higher price and they pay closing costs, that way the closing costs are part of your loan. This usually works. Realtor.bank can tell you the closing costs.
- realtor.sailorLv 74 years ago
Talk to a lender that offers FHA loans. They're just 3.5% down and in many areas FHA offers down payment assistance.