How to Get Your Closing Cost Paid

Besides the down payment, every buyer has to pay a substantial amount in closing costs. These costs can vary based on the state you’re buying in and the price of the home. However, they are set in stone, with very few workarounds. One workaround is to have your closing costs funded using an alternative method. Many of these options will either cover a portion of the closing cost or reimburse the closing costs once closing is complete. As a result, you should still use a closing cost calculator to determine how much you should budget for a stress-free closing.

4 Ways To Fund Your Closing Costs

You can be creative with the methods you use to finance closing –– asking family and friends for gifts is one such way. However, using a method like this isn’t guaranteed, and if you aren’t able to raise the necessary amount on time will jeopardize the sale. For that reason, you should consider implementing one or more of the following methods to partially fund your closing cost.

Have It Rolled into Your Mortgage

Depending on the type of mortgage you’re applying for, your lender may be able to include the cost of closing in the mortgage amount. Although you’ll pay interest when you finally repay the closing cost, it can ensure that you aren’t short on cash when closing approaches.

Buy Directly From a Seller

A few FSBO sites and discount real estate brokers offer rebates to buyers who use their platforms to buy directly from the seller. One example of this is Houzeo. Besides having a comprehensive closing cost calculator for buyers, they also offer a rebate for buyers who use their platform to buy a home.

You can determine the amount of your buyer rebate by using Houzeo’s closing cost calculator.

Thankfully, you can use this option in addition to others on this list, enabling you to save far more in closing costs.

Request a Seller’s Credit

In a buyer’s market, you can negotiate with the seller to cover a portion of the closing costs. However, in a seller’s market –– which many states are currently in –– sellers aren’t as eager to negotiate and will likely choose other offers instead.

You can mitigate this by suggesting that they cover the closing costs in exchange for a higher sale price, which allows you to pay zero up-front, but would mean that you’ll have a larger loan amount and would be paying back the closing cost with interest.

To ensure you don’t suggest a higher sale price far more than the seller would pay to cover your closing cost, use a closing cost calculator like Smart Asset or Houzeo. These closing cost calculators for buyers are the most accurate, which gives you an idea of what you should be negotiating for the seller to cover.

Look into Down Payment Assistance

If you’re a lower-income or middle-income first-time buyer, you may qualify for government assistance in the form of a grant or loan. This down payment assistance may cover the cost of closing but will depend on the program available to you.

Although the cost of closing will be well into the thousands, if you know the precise amount you can expect to pay, you can better navigate negotiations.