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On a new home purchase is there any way to cover the closing costs in the loan?

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On a new home purchase is there any way to cover the closing costs in the loan? I can only afford to put 5% down for the down payment so I won't be able to afford the closing costs. Is there anything I can do?
Thank you!
Heather
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August 18 - Bourbon
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Heather,

Are you applying for the loan in your own name or with someone else?
...and, have you (or the other person/s applying with you) had ownership of a home in the past 36 months? If not, you may qualify for the tax credit up to $8000.

The government will allow your lender to loan you money to pay for all of your (and only) financing costs and settlement costs (not down payment), and you can pay back the loan when you receive your cash from the government after amending your 2008 tax returns to get it immediately.

Hope this helps!

Dan Currie
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August 18
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If the seller doesn't want to help with the closing cost you can try to get what's called "seller concession." Every state is different so ask your realtor what is allowed in your state. For instance in California they allow up to 6% seller concession so for a purchase of $100,000 you could get up to $6,000 to help with the closing cost.

This cost is rolled into your financing so the seller shouldn't have an issue with this. This is available for either FHA or Conventional loans.
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August 18
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There really is no way to roll closing costs into a loan.  But you can choose an FHA loan which has only a 3.5% down payment and also ask the seller to pay some of your closing costs which is quite reasonable in most areas.  You can raise the purchase price slightly to accomadte the seller but many times the seller is aware they may have to pay closing costs as they have been advised of this by their realtor.
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August 18
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There are multiple ways to do this.

Depending on where you are in the purchase process you could negotiate a credit from the Seller to be used towards closing costs.

If the home were to appraise for more than the agreed sales price you could build in a concession to cover the closing costs. Basically you would just be increasing the purchase price to allow the sellers to get their portion and allow you to roll the closing costs into the loan. Just remember you would be paying interest on those costs over the life of the loan.

You could also get a gift from a family member. If you are doing a FHA loan you could have a gift for the full down payment and/or costs. For a conventional loan you would need to have 5% of your own funds (which it sounds like you do) but receive a gift above and beyond that amount.

If you are taking a FHA loan you could reduce your down payment to 3.5% and use the remaining amount towards the closing costs in conjunction with some of the other options.
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August 18
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you cant roll in any costs into your new loan ...what you might try  is to ask the seller to pay the closing costs for you ( this is common these days and is called a " seller credit ")
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August 18
 

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