Want to buy a home but also hang on to your cash?
Know your options
There are two major out-of-pocket costs that are due at closing — the down payment and closing costs. The down payment is a percentage of the home’s sale price that you pay up front. Closing costs are administrative fees charged as part of the home financing process that include:
- Loan origination fee
- Loan discount points (if applicable)
- Appraisal fees
- Credit report costs
- Taxes and insurance
- Title fees
- Recording fees
- Funding fees for specific programs
If you're concerned about upfront out of pocket costs, speak to your licensed loan officer. Fortunately, there are several loan programs that not only have lower down payment requirements, but also allow you include closing costs into the loan — or negotiate with the seller to pay them for you.
FHA home loans
With an FHA home loan, you can finance your closing costs or negotiate with the seller to contribute toward them. However, the seller can only contribute up to 6% of the lesser of the home’s sale price or appraised value. FHA loans also have a lower down payment requirement of 3.5%
USDA rural home loans
In addition to great benefits like 100% financing (meaning no down payment is required) and flexible income and credit requirements, you may be able to finance the closing costs associated with a USDA rural home loan or negotiate with the seller to pay them for you.
VA home loans
A VA home loan provides great benefits, such as 100% financing and no mortgage insurance for those who’ve served in the U.S. Armed Forces. With a VA Loan, the only financeable closing cost charge is the VA Funding Fee. All other closing costs must be paid at closing. However, the seller can pay up to 4% of your closing costs. (Only certain fees fall under this 4%). Contact us for additional information.
Take the next step
We’re happy to discuss your situation, understand your goals, and walk you through every step of the process to get you qualified for a loan that’s right for you. To learn more about your closing cost options, contact one of our licensed loan officers.
CrossCountry Mortgage, Inc. is an FHA Approved Lending Institution, and is not acting on behalf of or at the direction of HUD/FHA or the Federal government. All loans subject to underwriting approval. Certain restrictions apply. Certificate of Eligibility required for VA loans. CrossCountry Mortgage, Inc. is an FHA Approved Lending Institution, and is not acting on behalf of or at the direction of HUD/FHA or the Federal government. All loans subject to underwriting approval. Certain restrictions apply. Certificate of Eligibility required for VA loans. USDA Loans: Borrower income limited to 115% of median income for the area. Borrowers must have reasonable credit histories. 30-year loan term. Housing costs cannot exceed 29% of income; total debt payments cannot exceed 41% of income. Homes must meet state and HCFP building codes. Funding fee required. Available only in designated USDA rural areas.