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You are on the two yard line. The end zone is in sight. What’s standing between you and the touchdown? That line of massive 300 lb. dudes!

That’s how many people feel about closing costs when it comes to their mortgage. They are so close to seeing their dream of homeownership become a reality, but having to find those closing cost dollars can seem to be an almost insurmountable hill to climb at the end of an already long journey.

But don’t throw in the towel just yet. There are ways to get over that hill and into your new home! Let’s dig in a little further.

How Much Are Closing Costs?

Average closing costs for the buyer run between about 2% and 5% of the loan amount. That means, on a $200,000 home purchase, you would pay from $4,000 to $10,000 in closing costs.

When buying a home, you should be able to negotiate some of the fees to lower your closing costs. Some states and communities also offer low-interest loan programs or grants to help first-time home buyers with closing costs as well.

How Can You Pay Them?

There are a few different options for how to pay closing costs. All these options should be on the table for your loan, and you best option will depend on the variables of your specific loan.

1 — the Seller Pays Closing Costs

Negotiating to have the seller cover the closing costs is always an option. Sometimes, when the buyer and seller are very close to a deal, the last piece the seller can offer the buyer that puts the deal over the top is covering closing costs. Be mindful of this as your first option as the buyer. It can make a big difference for your bottom line.

2 — Roll the Costs Into the Loan

This is another good option for you to consider. It isn’t doable in every situation, but for some, it is a possibility. Obviously you’ll have to pay interest on those costs if you choose to go this route, but if it’s the difference between getting in your home or not, it’s definitely an option to consider.

3 — Pay for Them as a One-time Expense

If options 1 and 2 aren’t feasible for you or not something you want to consider, you can simply pay the closing costs as a one-time expense in conjunction with the purchase of the home. If the seller won’t cover the costs and your situation isn’t suitable to roll them into the loan, this may be your best option.

Many people go into the mortgage process insufficiently aware of closing costs and what they can mean for the loan process. We don’t want you to fall into that category! The more knowledge you have going into the process, the easier and better it will be for you and all involved.

We’d love to talk to you more about the options available to you. Reach out to me today at david.kling@tlclender.com if you’d like to learn more about our current low rates and options for you to consider.