Can I include closing cost in to the loan amount if I am going through FHA with 3.5% down?

Asked by Jainesh Patel, Herndon, VA Wed May 9, 2012

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Trevor Curran, Mortgage Broker Or Lender, Great Neck, NY
Wed Oct 17, 2012
Good morning Jainesh Patel,

The FHA program allows a Seller to pay up to 6% of the Purchaser's closing costs in a purchase transaction. So, yes, your Realtor can negotiate with the Seller to include closing costs in the Offering price you make on the home.

You will want to consult with your Mortgage Banker as to how much may be needed for the Seller's concession for closing costs in your area as closing costs vary widely from State to State, County to County, City to City.

Trevor Curran
NMLS #40140
Mobile: 516-582-9181
Office: 516-829-2900
Fax: 516-829-2944
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker – NYS Dept. of Financial Services
0 votes
lizsantos1124, , Parsippany, NJ
Wed Oct 17, 2012
Several options available, including one not mentioned below. I assume you are moving to NJ. If not, you must seek out similar programs wherever you are going.
1. Lender credits are available for FHA loans. In other words sometimes it can be negotiated to have the lender pay for part of the costs.
2. seller's concessions, as previously mentioned, are available.
3. Not yet mentioned are the NJHMFA grant programs. These can provide a forgivable grant of up to 5% of the purchase price, depending on the situation. The funds can be used for anything including downpayment. Here is the web site address so you can research this.
Be careful of fake NJHMFA pages set up by other entities.

As you research this, you will find that only a few lenders participate in this program. My company is one of them. Reach me here if you like:

Best of luck to you!
0 votes
Chad Barris, Mortgage Broker Or Lender, Parsippany, NJ
Thu Jun 14, 2012
Please feel free to contact me at to discuss further.

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Mickey Balla…, Mortgage Broker Or Lender, Parsippany, NJ
Wed Jun 13, 2012
Yes you may. We offer special no cost closing cost loans without having to request a concession from the seller like mentioned below. If you would like more information, please contact me:

Mickey Ballantine

Feel free to email or call me to see if you qualify!
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Barbara Weis…, Agent, Tenafly, NJ
Sat May 12, 2012
Have you spoken with a good banker to figure out what your closing costs will be for your price range? Perhaps they're not as high as you think? If you can put 5% down, you might qualify for a conventional loan and save yourself thousands which could go toward closing costs. If you add closing costs into your mortgage, you're effectively paying more for the house because you're raising the cost. I think you need the advice of a good banker and also that of a good real estate attorney. You can contact me for referrals on this. However, I've never believed in adding to your costs.
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Annette Levi…, , New York, NY
Thu May 10, 2012
The sellers' concession can pay the closing costs, which usually means you are paying a higher price for the house. With a FHA mortgage you can receive a gift from a relative to pay closing costs therefore not paying more for the house.
If you go sellers' concession, make sure your realtor does comparable search to make sure the house will appraise out.
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Travis Waller, Agent, Englewood Cliffs, NJ
Thu May 10, 2012
Yes you can. That's typically called a sellers concession. Feel free to contact me if you have additional questions. 201.755.6517

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Gina Chirico, Agent, Fairfield, NJ
Wed May 9, 2012

Yes, it would have to be a sellers concession and the seller would have to agree to the concession. I've had success representing buyers who've requested sellers concessions. If the concession is added onto the amount the seller wants to net, the sellers usually don't object to it. John does an excellent job of explaining it below.
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Phil Hipshman, Agent, Teaneck, NJ
Wed May 9, 2012
The answer is yes and no, yes you can but you may be inflating the value of the house and in this terrible market your target house may not appraise out to the value, so where in days past this was done often, it is done much less frequenrly now. Talk to your mortgage person also, ir really depends on the house and the dircumstances.
Phil Hipshman
201-446-8159 Cell
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Brian Morgen…, Agent, Hackensack, NJ
Wed May 9, 2012
I would recommend speaking with a mortgage professional familiar with all the nuances of FHA financing. FHA allows up to 6% (of contract price) in seller's concession, currently.
0 votes
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