How to cut down on closing costs (loan, finance, loan)

[Om_shanti]

How do you cut down on closing costs... or defer it?
We will be paying about 10% down payment. Are there any benefits to "seller paid closing costs"??

[snowdenscold]

You can finance them into the loan as one option - it doesn't get rid of them, and you end up paying interest on those costs, but you don't owe any money up front.

Seller paid closing costs just moves money around different buckets - you essentially get more money and they get less, only it doesn't require lowering the purchase price. So it's just one more thing up for negotiation with the seller.

[Om_shanti]

Originally Posted by snowdenscold

You can finance them into the loan as one option - it doesn't get rid of them, and you end up paying interest on those costs, but you don't owe any money up front.

Seller paid closing costs just moves money around different buckets - you essentially get more money and they get less, only it doesn't require lowering the purchase price. So it's just one more thing up for negotiation with the seller.

Would the seller be unwilling to do it for one reason or other? I am hoping the lender (bank) would allow doing this...
I think 10% is a pretty okay sized downpayment for the bank to not bother about this..?

[FalconheadWest]

The sellers don't actually pay closing costs. Search the forum. There is tons of stuff on this. You, as the buyer, finance your closing costs. Sellers don't just give money away. If you contract for $200k with the sellers paying $5k, that means you could have bought the house for $195k with you paying your own $5k. Why would sellers "pay" a buyer's closing costs? It's all about the net number to the seller.

[snowdenscold]

Originally Posted by FalconheadWest

The sellers don't actually pay closing costs. Search the forum. There is tons of stuff on this. You, as the buyer, finance your closing costs. Sellers don't just give money away. If you contract for $200k with the sellers paying $5k, that means you could have bought the house for $195k with you paying your own $5k. Why would sellers "pay" a buyer's closing costs? It's all about the net number to the seller.

Right, I agree - hopefully I wasn't unclear above.
The seller isn't required to pay any of your closing costs at all - it's just a different variable at play with them in the negotiation process.

Maybe the home is listed at 400 - you could offer 390, 400 w/ 2% closing costs paid, 495 w/ 1%, etc etc. The permutations are limitless. Point is, it's for situations where you want the seller to come down in price, without actually lowering the house price too far (which you might prefer for a whole host of reasons).