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Is the closing cost for the loan coming out of our down payment?

If so, it will make down payment less than 3%. How can we aovid? by cindy.lam528 from Garden Grove, California. Oct 9th 2015 Reply


Richard Airey (richardairey)
#3 ranked lender in Maine - 662 contributions

The closing costs are "in addition" to your down payment, unless the seller agreed to pay your closing costs for you.

Oct 9th 2015
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Jesse Stroup (jessestroup)
#4 ranked lender in Idaho - 593 contributions

The loan closing costs are in addition to the down payment of the loan. Jesse Stroup California Mortgage Professional www.CaliforniaHomeLoanLender.comwww.JesseStroup.comNMLS# 6229

Oct 9th 2015
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Jesse Stroup (jessestroup)
#4 ranked lender in Idaho - 593 contributions

Also you can get gift funds from a family members to help pay for the closing costs. But all purchase loan require a down payment plus loan closing costs. I hope this helps. Jesse Stroup California Mortgage Professional www.CaliforniaHomeLoanLender.comwww.JesseStroup.comNMLS# 6229

Oct 9th 2015
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Cary Brooks (Cary_193_811)
#875 ranked lender in California - 10 contributions

Closing costs would be in addition to your down payment but you may be able to go with a slightly higher interest rate and get the lender to pay most or all of the closing costs.

Oct 9th 2015
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Dan Paladin (dpaladin)
#1 ranked lender in California - 582 contributions

No, the closing costs would be in addition to your down payment, assuming you are paying for them....

Oct 9th 2015
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,722 contributions

More info needed.. If your putting the minimum down payment, then you will need the down payment AND funds for closing costs... but if you negotiated your purchase correctly, you would have asked the seller to contribute/pay for your costs.. But realistically, you should be asking your loan officer this question.. he has your file and should be very familiar with what is needed, so he's better equipped to answer your question... William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Oct 9th 2015
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,930 contributions

You have two money items when buying a house. First is down payment, which you always need to have out of pocket. Second is closing costs (appraisal, credit report, title fees, underwrite, processing, state taxes, pro-rated property taxes, first years homeowners insurance, and more). Closing costs also need to be paid, but there are a few ways to reduce them as an out-of-pocket expense. Obviously you can pay cash out of pocket, which many people do. Next, and pretty common is known as "Seller paid" closing costs. The seller isn't really paying anything, rather it is a way of rolling the costs into the loan so you pay them over time versus out-of-pocket today. Next is paying them by taking a higher interest rate, Same concept. You are still paying, but over time versus out of pocket. Last is a combination of all three, which is what just about everyone ends up doing.

Oct 10th 2015
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Sara Deere (Saraloveshomeloans)
#39 ranked lender in Kansas - 538 contributions

Depending on what area of the country, USDA and VA will help you obtain a home with 100% financing. Closing costs assistance can be achieved by the seller agreeing to a certain percentage, possible gift funds from family members, or an interest rate increase.

Oct 12th 2015
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Mark Hemingway (SFSLend)
#2 ranked lender in Colorado - 994 contributions

Closing costs are always paid by the borrower. Your down payment is technically going all towards setting the loan amount of the purchase price. Typically conventional loans are priced in 5% increments. So if you have a specific amount of money for the transaction you could put less down on the house so you have some funds available for the closing costs. You can also have your mortgage loan originator give you a couple options on rates to show a lender credit to help offset closing costs. For years I always do what is called a no cost loan. Rates are still historically low and it does not make sense to pay for closing costs if you can avoid it. Or at least get some sort of lender credit to offset some of the closing costs. Do not worry about getting lender credit too high to cover your escrows of taxes and insurance though.

Oct 14th 2015
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