There’s many hidden costs when it comes to buying real estate. You have inspection fees, attorney fees, appraisal fees, and so on and so forth. All of these fees, what you call closing costs, sum up to be anywhere from 3 to 6 percent of the total loan. And that depends on if you go with a FHA loan or a conventional loan. With an FHA loan you may pay more fees than what you would if you went with a conventional loan. This is all because you may be a little riskier credit wise, FHA loans have less strict lending restrictions so people with lower credit scores go with these loans making the closing costs more expensive.

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But fear not there are a number of ways to work your way around paying these closing costs and even down payment. You just have to use your resources well, and search through the internet until you find a blog that will guide you through the way, like this one! Being a first time home buyer opens up a lot of doors when it comes to avoiding closing costs and high percentage down payments.

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1 Find Grants that will give you up to 10k to fund your down payment and closing costs.

Let’s go into further detail on what grants are. Grants give you money that does not need to be paid in return. Money that comes with no strings attached is by far the single and best kind ,and it can help tremendously with your down payment. There are various grant programs out there designed to cater to your areas of need. Whether it’s money for a down payment or closing costs. You can receive grants from nonprofits, local governments, and even employers.

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Examples of Grant Programs (click the programs for more information):

Freddie Mac Home Possible 

HomePath ready buyer program

NJHMFA state-wide Down Payment Assistance Program

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2 Apply for a VA or USDA loan which will allows no money down

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The U.S. Department of Agriculture also insures 0% down payment loans. The requirement is that you must buy a house in a rural area and meet certain income restrictions. Closely consider what’s important to you in a home and a location. When it comes to a VA loan, these mortgages are usually offered through a Department of Veterans Affairs program. They’re mostly available to active and veteran service members and their families, VA loans are backed by the federal government, but are issued through private lenders. VA loans have generous terms, such as no down payment, no mortgage insurance, no prepayment penalties and limited 

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3 Ask for Seller Concessions, and let the seller pay for your closing costs 

When going with a FHA loan you can only receive up to 3 percent of sellers concessions. So if your house’s purchase price is $100k, you’re getting $3k from the seller. This should cover the closing costs in full if it doesn’t you can roll the rest of closing costs into the end of the loan. 

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The next step would be paying the down payment, which would equal $3500. If you want to take it even further, you can borrow the $3500 from a family member. If you go with this method you would end up paying $0 to own a piece of land and a piece of property.