Here are four different methods to getting money for closing costs.
Previously, I talked about how to buy a home with no money down. Today I’ll go over four different available methods to help you cover the extra buying costs:
1. Gift funds. You can receive gift funds from a family member, non-profit, church, employer, or another approved source. Most loan types let you use gift funds to cover closing costs.
2. Lender credit. Lenders can issue a credit towards closing costs if you choose a higher-than-market interest rate.
3. Seller’s credit. When sellers really want to sell their house, they will offer a seller’s credit in the purchase contract to help the buyer with closing costs. Sellers typically offer between 3% and 6% of the home’s purchase price. These funds can’t be applied to the down payment but can reduce or eliminate any need to come up with closing costs.
4. Down payment assistance programs and grants. Many cities and states offer down payment assistance. In many cases, you can receive assistance for the down payment and all the closing costs associated with the loan.
If you have any questions, feel free to reach out to me. I look forward to hearing from you.