Profile picture for user2710510

Are there any banks or brokers out there that are paying closing costs or have minimum closing costs

My wife and I are purchasing a home. This will be our first home as well. We are planning on going FHA and put the 3.5% down. Any lenders out that are paying closing costs or having competitive closing costs fees. We are trying to minimize costs as much as possible. The builder agreed to pay roughly $2000 towards closing costs and most of the places we have got quotes from we are looking at about $5000 in closing costs in addition to the 3.5% down
  • July 23 2012 - Edmond
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Answers (9)

Best Answer

Profile picture for benwooten
Be very careful. "Closing costs" is a term that has a broad range of potential definitions. You want to make sure that everyone is using the term the same way, meaning all of the buyers closing expenses and impound (prepaids).

I'm assuming that you mean that you have the 3.5% for your down payment but nothing left over to pay any of your closing expenses. I'm also assuming that you're not under contract with the builder and you have not been working with a Realtor.

It is always advisable to have someone on your side. The builder's representative may be lovely, but that person represents the builder's interests and not yours. You may consider finding a Realtor to help you negotiate with the builder. That said... I don't know what the chances are the Realtor you choose is going to be any better at negotiating with the builder than you have been. So... if you're pretty comfortable with the deal you have with the builder but just need the closing costs covered, you could also just threaten to go find a Realtor. 

For example: We sure would love to purchase your home, Mr. Builder. We are prepared to give you earnest money and sign a contract today. But the truth is, we just can't afford to cover our closing expenses on our own. We've decided that if you can't promise to pay all of our expenses at closing, we'll have no choice but to seek a Realtor to advise us how to proceed.

You can also roll the closing expenses into your sale price and have the builder pay them. If appraisals have been solid in your area, the builder will likely agree.

But whatever you decide, ask for a Fee Worksheet from your lender detailing all of the expenses associated with closing. Go through it with your lender, one line item at a time. You should clearly understand where every penny is going [particularly if you don't have a Realtor]. THEN, visit your builder and go over the Fee Worksheet with him/her and make sure [in writing] that everyone agrees exactly what will be paid on your behalf.

Best of luck!



  • July 23 2012
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Profile picture for user2710510
We haven't selected one. Everytime we get close to selecting one the communication drops off and we don't hear from them regarding questions we have. So the search continues. We were told by the last lender we spoke with to possibly wait to lock as the rates may go down again before the house is done in October. I asked if they could send a good faith estimate for fees and poissible estimate of monthly payment like other lenders we have gotten and they never responded after almost a week
  • July 31 2012
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You should easily get all closing costs and prepaids covered with a 3.5% rate today after applying the builder's $2000 allowance. Have you selected a Lender or Broker and ready to lock?
  • July 31 2012
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Profile picture for user2710510
Purchase price is $205,000
  • July 31 2012
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It's a no brainer, you will only need the 3.5% down payment at closing, minus the $1000 you already paid. Any Lender or Broker can give you that if the purchase price will be over $150K. What is the purchase price?  
  • July 31 2012
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Profile picture for user2710510
Yes that is correct. I would like to be able to just bring our 3.5% down and have the rest taken care of by the lender and builder. The builder is putting in roughly $2000 towards closing costs so if we could find a lender that would put in the rest we would be golden. We have put down $1000 earnest money for them to start building. We were told that would count towards the 3.5% down so we could subtract that from the amount. Thanks for the detailed explanation I didnt know all of that
  • July 31 2012
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Profile picture for localhomes
I know of a few lenders that will allow the seller to pay for up to 6% of buyers closing cost, in which allows some buyers to walk into the house with hardly any closing cost coming out of their pocket
  • July 29 2012
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I am surprised that you are getting quotes that don't cover the closing cost/prepaids above the $2K the builder is paying.  It is almost impossible to get a quote that doesn't include the lender paying some or all of the closing cost/prepaids.
Any lender that has pre approved you for a loan (I am sure that must have happened before you committed to buy the home), certainly knows the amount of funds you have available. It would be very simple for the lender  to cover the difference that will be required with a lender credit.
Contact me through my profile if you have questions.
  • July 23 2012
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FHA loans pay a high premium so it would be easy to take a rate that pays enough premium to cover the closing costs.  
  • July 23 2012
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