3 Options for Financing Your Closing Costs

Financing closing costs on a mortgage can add to the expense of home ownership. You will need to repay the debt on the closing costs in addition to your mortgage debt for the first few months or years you own your home. Instead of using a high-cost option, try these low-cost options to cover the closing costs.

#1 Seek Closing Cost Grants

The Federal Housing Administration offers first-time home buyer grants sufficient to cover the closing costs of a mortgage. Researching the grants at your local FHA office can provide you with a free way to cover the closing of your home.

#2 Ask for Seller-Paid Expenses

Instead of asking a seller to reduce the price of your home, ask the seller to pay the closing costs. The overall expense is the same to the seller. To you, though, the impact is much greater on the beginning of a mortgage when you most need assistance.

#3 Seek a Mortgage Buy Down

The seller may be willing to buy down your mortgage instead of paying closing. The same couple of thousand dollars can be handed to the lender, and your interest rate will be lower for a few years. This lower sum can allow you to make payments toward a separate closing cost loan without feeling too pressured in your finances.

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