Closing Cost Options That Help Buy or Sell a Home

By
Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI
https://activerain.com/droplet/4TsM
Closing Cost Options That Help
Buy or Sell a Home     



     The accumulation of a Down Payment is often a First-Time Homebuyer's  primary focus once the decision to buy has been made.  Monetarily and mentally, the down payment becomes the one central goal they focus on ...  

 Gene Mundt Mortgage Website     So when I raise questions regarding the availability (and source) of funds needed for Mortgage Closing Costs, the question can catch them by surprise.  

     Oftentimes, First-Time Buyers are either completely unaware that funds will be needed for these Costs, they've (incorrectly) assumed that their Down Payment covers them, or that the costs can be "rolled into the loan" (not allowed, in MOST cases).

     But it's a fact:  There are (typically) Closing Costs to consider when borrowing money to buy or refinance a home.  


     What are some of Closing Costs encountered?  The following are the most commonly seen Closing Costs in Chicagoland transactions:

  • Title Insurance
  • Closing Services
  • Lender Fees 
  • Home Insurance Premium (also Escrow set-up)
  • Attorney Fees (in Attorney States/if used
  • Appraisal Costs
  • Real Estate Taxes (Escrow set-up)
  • Home Inspection Costs
  • Recording Fees
  • Transfer Taxes (where applicable)
  • Credit Report Fees
  • Flood Certifications (where applicable)
  • Homeowners Association Documents (if applicable)


     ... they can add up to thousands of extra dollars needed in order to close a loan.  
     

 Preparing to Buy a Chicagoland Home: Seller-Paid Closing Costs

     
     But there's good news.  Closing Costs don't need to be a hurdle for Buyers to jump.  Options are available to assist Buyers with some of these Costs.   


     One such option is for Buyers to request that the Seller pay a portion of their Closing Costs.  

 

     It's important to point out that this request should be made at the time of your offer and become part of your Real Estate Contract. The payment of these fees is subject to guidelines.

     These Seller contributions are seen fairly often in Chicagoland home buying transactions.  They help facilitate real estate transactions, as they make it possible for Buyers and Sellers to initiate and complete deals that would not have been possible otherwise.  

     Note:  There are maximum contributions a Seller can make.  Different lending programs allow for different contributions.  Those contributions, expressed as percentages of the Sales Price, are provided below:  

     For Conventional Loans:

  • Fannie Mae -  3% if Owner-Occupied  *
  • Freddie Mac - 3% (2.5%in some cases) if Owner-Occupied
  • Investment Property - 2%

    *  Can be greater, if Loan-To-Value is less than 90%
     
     For FHA:

  • Up to 6%

     For VA:

  • Up to 4% 


     Besides the obvious benefit of initiating or keeping a transaction together ... the Seller-paid Closing Costs option can also provide financial "flexibility" to a Buyer after their Closing.  The merits/disadvantages of using this option is
something that I, as your Mortgage Originator, will analyze and discuss with you prior to your making an offer on a home.

     Closing Cost monies don't have to be an insurmountable hurdle to your buying a home or qualifying for a mortgage.  Many options exist that can help you buy.  

     The key to your success lies in finding and working with a Mortgage Originator that is aware of their availability, offers them as a part of their services, and is successful in putting them to work on the clients' behalf ...


      To learn more about the monies needed to buy a Chicagoland - IL - WI home, please read my article, "Think You Need a 20% Down Payment?", then contact me with your questions ...


 

     *  Hoping to Buy, Refinance, or Build a Home in Will County or elsewhere in the Chicagoland area?  Contact me!  I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
I can be easily found at:

 

Gene Mundt
Mortgage Originator  -  nmls #216987  -  IL Lic. 031.0006220  -  WI Licensed
 
American Portfolio Mortgage Corp.
nmls #175656
 
Direct:  815.524.2280
Cell or Text:  708.921.6331
eFax:  815.524.2281
 
Posted by

  

 Twitter Account of Gene Mundt, Mortgage Lender   LinkedIn Account of Gene Mundt, Mortgage Lender   Facebook Acct. of Gene Mundt, Mortgage Lender   Pinterest Acct. of Gene Mundt, Mortgage Lender   

   Gene's Chicagoland Blog/Gene Mundt, Mortgage Lender  

    

 

Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

Your Referrals & Testimonials are Always Greatly Appreciated! 

 

Email Me .. to be added to my Mortgage & Real Estate Newsletter

close

Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Gabe Sanders 07/31/2016 04:07 PM
Topic:
Home Buying
Location:
Illinois Will County New Lenox
Groups:
Realtors®
Mortgages
Chicago Area Real Estate BUZZ!
1st Time Buyers
Bananatude
Tags:
mortgages
closing costs
down payment
buy a home
sell a home
real estate contracts
closing cost options

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
1,006,705
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Very comprehensive description. Suggest an example of a avg priced home and put in some range values and tally total.

Thanks

Jul 22, 2016 05:37 AM #9
Rainer
263,898
Chris Lima
Atlantic Shores Realty Expertise - Port St Lucie, FL
Local or Global-Allow me to open doors for you.

Nice post post, Gene.  The information is clear and easy to understand.  I will share this one. Thanks!

Jul 22, 2016 06:45 AM #10
Rainer
6,360
Nancy Hertz
William Raveis Legends Realty Group - Briarcliff Manor, NY

Thanks for the reminder Gene, another reason to check in with a buyer client by phone. Kudos.

Jul 22, 2016 08:48 AM #11
Rainmaker
2,782,335
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

Gene,  This is all great information for home buyers. The closing costs can add up ... quickly.  If credits are to be issues then making them part of the contract is the best course of action.  Congratulations on the Feature!

Jul 22, 2016 10:59 AM #12
Rainmaker
1,523,593
Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

This blog was definitely worthy of being featured, some people aren't aware that they can get the seller to pay part or all of their closing costs.

Jul 22, 2016 11:07 AM #13
Rainmaker
3,247,520
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Gene

Thanks for sharing an outstanding explaining closing costs.

Good luck and success.

Lou Ludwig

Jul 22, 2016 11:57 AM #14
Rainmaker
3,247,520
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Gene

Congratulations on your post being a feature.

Good luck and success.

Lou Ludwig

Jul 22, 2016 12:05 PM #15
Rainmaker
3,056,483
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Hi Gene... well-written post on an issue that many don't fully understand and deserving of a feature. The biggest issue with closing costs right now is that in a market that is so tight on inventory, I'm not seeing sellers need to provide closing costs. I see more buyers now rolling them into their loan with the lender... maybe a post on that option?

Jul 22, 2016 09:07 PM #16
Rainer
55,046
Tabitha Rector-Richardson
Premier Homes Realty - Owings Mills, MD
Premier Homes Realty (443) 415-4215

If the client is unaware or has an unrealistic view of how much is really needed for closing,  I blame the lender.  It is their job to discuss these matters with the client..  Some Buyers aren't comfortable discussing their finances with the Realtor.  Often, I find myself having to explain what the Buyer should expect if they choose a certain house and that's when I'll find out their lender hasnt discussed this in detail with them... 

Jul 22, 2016 10:37 PM #17
Rainmaker
2,445,370
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

When I was buying for the first time and thought I had it figured out (lol), closing costs came up. I thought it was a gimmick and argued against it all. In my mind, I just wanted to purchase a home not all these services. This is a subject that should be brought up more often as it is necessary and mandatory in Real Estate

Jul 22, 2016 11:18 PM #18
Rainmaker
3,797,272
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good morning Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi ,

What a worthy featured post! Great list for buyers so they can understand all that will be required when making a home purchase. With our high demand and low inventory rarely will sellers pay closing costs unless it is in lieu of making repairs.

Jul 23, 2016 12:12 AM #19
Rainer
514,081
Sham Reddy CRS
H E R Realty, Dayton, OH - Dayton, OH
CRS

Thanks for sharing!!!

Seller-paid Closing Costs option can also provide financial "flexibility" to a Buyer after their Closing.  The merits/disadvantages of using this option issomething that I, as your Mortgage Originator, will analyze and discuss with you prior to your making an offer on a home.

Jul 23, 2016 01:24 AM #20
Rainmaker
280,079
Jeanne Gregory
RE/MAX Southwest - Sugar Land, TX
The most important home I sell is YOURS!

Lots of problems right now.  First time homebuyers with no closing costs funds in their pockets really don't have a chance.  Our market, especially the under $200K price range, is a feeding frenzy.  With multiple, multiple offers, sellers won't even consider an offer with closing cost assistance. 

Jul 23, 2016 02:06 AM #21
Rainer
204,240
Macy Babb ... North Georgia Realtor
Re/Max Around Atlanta Realtor - 404-234-6166 - Cartersville, GA
Realtor, SFR, HUD/REO Certified

Working with two buyers now that "needed" all their closing costs paid.  It does make it interesting in the contract negotiations.... but it does help to know the different programs and what is allowed

Jul 23, 2016 06:32 AM #22
Ambassador
1,613,698
Harry F. D'Elia
RentVest - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

It is nice to have options as a buyer when closing on a home. Just close the deal.

Jul 23, 2016 10:28 AM #23
Ambassador
3,982,858
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Great information here Gene. In my market sellers pay most of the closing costs and lenders have learned to be very creative too giving lender credits to help keep the costs down.

Jul 23, 2016 11:25 AM #24
Ambassador
4,299,366
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

This indeed is a great solution - a win-win for some buyers Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi .

Jul 23, 2016 04:05 PM #25
Rainmaker
2,005,603
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Southlake, TX
Selling Homes Changing Lives

As a Selling Agent, I feel it's my duty to provide closing costs up front to my Sellers so there are no hidden surprises. They always appreciate it.

As for you, you did an outstanding job on this post, as you always do. You are definitely someone I would trust for my Chicago and Wisconsin relatives and friends. 

Jul 27, 2016 01:24 AM #26
Rainmaker
870,553
Elyse Berman, PA
Best Connections Realty, Inc. - Boca Raton, FL
Boca Raton FL (561) 716-7824 CRS, ABR, GRI,ePR

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi This is a wonderful post explaining closing costs to first-time home buyers.  Such important information!

Jul 31, 2016 08:44 PM #27
Rainmaker
3,797,272
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good morning Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi ,

I just caught your post when Gabe Sanders re-bogged your post. Congrats on a very worthy featured post..you really provided excellent information!

Jul 31, 2016 09:54 PM #28
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
1,223,490

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

708.921.6331 - 40+ yrs experience
Contact Me For Mortgage Answers, Info & Assistance:
*
*
*
*
Spam prevention

Additional Information