Cover closing costs, quickly⚡

The VA loan has many benefits, most people would consider the ability to 100% finance the purchase of your home as the biggest. This causes many people to believe that there is no money out of pocket and that is not true. Closing costs are third party fees i.e. an appraisal so no matter how you are financing your home there will always be closing costs.

Closing costs will vary from person to person and house to house because they are all of the third party fees added together. Generally closing cost range from 3-5% of the purchase price. Your realtor or lender will be able to give you an estimate on the amount. Example: When purchasing a $200k house you could expect $6-10k in closing costs.

This is usually the question that follows after discussing how much closing costs are with your lender and the answer is no and also why we exist. Your mortgage can only be for the purchase price of your home.

One of the current options that buyers use when in a bind is taking a higher interest rate on your mortgage to get credit back at closing that can be applied towards your closing cost. While this method can be effective in covering some of your closing costs, it generally won't cover them all and you are also electing to pay a higher amount on a 30 year loan.

There are about 4 current options:

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  Pay them out of pocket

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  Negotiate them to come out of the sellers pocket

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  Increase your interest rate to cover them

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  Get a gift from family to cover them

We have the experience and expertise to help you out in some of the most common mortgage lending scenarios. If the seller is not willing to cover your closing costs and you do not have the funds, this may be your only option to buy your dream home. If you opt to increase your mortgage rate for lender credit, you will pay a lot more over the life of your mortgage – with one of our financing options, you have a short term payment that you can pay off as quickly as you want. If you do happen to have funds on hand to pay your closing costs, you still may want to finance them, in order to reallocate your savings for unexpected future expenses.