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Money Matters
Closing costs :(
By hyehokismember has saluted, click to view salute photos Comments: 2233, member since Tue Jul 30, 2002
On Sun Apr 29, 2012 09:30 AM

Hubby and I are in the process of looking to purchase our first home. We have the 5% saved up and have a price range. The only problem is I dont have anything for closing costs :( They are more than the downpayment!!! Anyone know how to get around them?? Please!

Po

8 Replies to Closing costs :(

re: Closing costs :(
By AlwaysOnStagePremium member Comments: 7417, member since Sun Apr 18, 2004
On Sun Apr 29, 2012 09:50 AM
In some places, part of bidding on the house can be to offer X ammount, with the condition that the seller take care of closing costs (or part of closing costs)...but closing costs are a reality of house buying and they have to be paid by someone. If you're not in a position to request it of the seller, then it's still up to you to find that money somewhere.
re: Closing costs :(
By Munkensteinmember has saluted, click to view salute photosPremium member Comments: 14381, member since Mon Aug 11, 2003
On Sun Apr 29, 2012 10:10 AM
You'll either need to shift your price range, change the type of loan to FHA or rural housing, depending on location, or hope that when you offer on a place that the seller will take care of it. That's in addition to things like title insurance though, so you do need more than the down payment.
re: Closing costs :(
By schuhplattlerPremium member Comments: 3037, member since Sat Dec 23, 2006
On Sun Apr 29, 2012 10:45 AM
I have not found anything fool proof for minimizing closing costs, but two rules usually pay off:

1. Whomever you deal with, start early, and be wary of any poor communication or (worse) reluctance to communicate. That is a sign to switch - deal with someone else. If you go all the way to the deadline, your back is to the wall. Realtors and, especially loan agencies, take advantage of this.

2. Deal with a credit union rather than a bank. In any event, don't deal with Chase Manhattan, and NE****VER deal with Suntrust.
re: Closing costs :( (karma: 1)
By J1ll Comments: 2344, member since Wed Oct 14, 2009
On Sun Apr 29, 2012 06:38 PM
Find a mortgage broker. They will shop around and help you find one that fits your needs. There are no closing cost options, though they usually have a higher interest rate. Some mortgages offer you the ability to roll your closing costs into your mortgage without penalty.
re: Closing costs :(
By cthompson1474member has saluted, click to view salute photos Comments: 306, member since Sat May 19, 2012
On Sun May 20, 2012 12:36 PM
I don't know how the market is where you are trying to purchase a house but if the sellers are desperate to sell many times they will split the closing cost (if not pay the majority) with you.
I bought my house over a year ago that had been on the market for over a year prior to that, they had lowered the price several times, when I put the offer in they agreed to pay the majority (not sure of the percentage) but I paid about $500 closing cost.
Keep in mind my house was owner financed.

Also look in to bank owned homes or HUD homes, they are generally cheaper and that would free up your money to be used for closing cost.
re: Closing costs :(
By Chaconnemember has saluted, click to view salute photosPremium member Comments: 6359, member since Thu Jul 12, 2007
On Sun May 20, 2012 02:27 PM
That is a negotiating point. Bid the asking price but condition it that the seller pays all closing costs rather than trying to negotiate a lower price. If you are in an area where there are bidding wars for property (rather rare in this climate), all bets are off.

You will have to pay insurance and in most localities you have to prepay taxes (that may be a large share of closing costs.) If you're lucky you only have to prepay six months, but at least in this area you have to prepay for a year. Five percent down is really the bare minimum nowadays. Most lenders here want 20% down. I hope you have been pre-approved for your budget and cash on hand. If you have had an analysis of your jobs, income, credit rating (which really must be stellar) and they accept what you have saved, your negotiating position will be far stronger than say, someone who puts a contingency on selling a previous residence. You should also get mortgage title insurance which protects you again someone uncovering an old mechanics lien, and unpaid 2nd mortgage, someone who has used the house as collateral for another purchase such as an equity line of credit or for a car purchase and hasn't discharged that loan, a dishonest lawyer handling the funds (as has happened here), a border dispute or encroachment.

Brokers around here won't even seriously show you property unless you are pre-qualified. Lenders are highly aware of the abuses of the mid-2000's first decade when many sale were based upon NIJAS (no income, no job verifications.) With bank foreclosure sales and short sales, you have to be really careful that you have an absolutely clear title to the property.

Jon
re: Closing costs :(
By SaraTheGrouchmember has saluted, click to view salute photosPremium member Comments: 8600, member since Thu Apr 17, 2003
On Sun May 20, 2012 03:12 PM
Often times (dependant upon geographic location, I've found) you can negotiate to have the seller cover the closing costs as part of the deal. It's a fairly common process here in the south. If the seller is motivated, they'll likely be motivated enough to cover it.

And just an aside - 5% down?! Damn! That's lucky! I've been looking into purchasing a home myself and I've found that most lenders prefer that you put 20% down! For me, that'd be around $18,000 versus the closing costs of around $2,500-3,000.
re: Closing costs :(
By oz_helenmember has saluted, click to view salute photosPremium member Comments: 11196, member since Sat Aug 10, 2002
On Mon May 21, 2012 12:54 AM
In Australia, you can't get a loan with only 5% deposit. You can get one with 10% but have to pay mortgage insurance. To avoid the mortgage insurance, you need a 20% deposit.

Helen

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