"I Thought It Was a Zero Down Payment Loan — So What’s Up With These Closing Costs?"

If you're like many first-time homebuyers, you probably got excited when you heard about zero down payment loans like USDA or VA home loans. Zero down payment? That sounds amazing — and it is! These programs are designed to help buyers get into a home without having to save tens of thousands of dollars for a down payment. But then you hear something that stops you in your tracks: "You'll still have closing costs."

Wait... what? I thought this was a zero down payment loan?

You're not alone in wondering this — and trust me, you’re asking a great question.

Here’s the simple explanation:

Zero down payment means you don’t have to put money toward the purchase price of the home — but there are still costs involved in the process of getting the loan, transferring ownership, and setting up your new home. These are called closing costs, and they are separate from your down payment.

Closing costs typically include:

Loan fees (like lender origination or underwriting fees)
Appraisal and inspection fees
Title insurance and title search fees
Escrows for property taxes and homeowner's insurance
Recording fees charged by your county
Credit report and flood certification fees
Prepaid interest (the interest that covers the days between your closing date and your first mortgage payment)

These items can add up to about 2% to 5% of the home’s price.

The Good News:

There are several ways to reduce or even eliminate what you pay out-of-pocket for closing costs!

You can negotiate with the seller to pay some or all of your closing costs using seller concessions.
Some lenders offer lender credit programs, where you accept a slightly higher interest rate in exchange for reduced closing costs.
In some cases, there are down payment and closing cost assistance programs that can help as well.

Think of it this way:

The zero down payment part makes homeownership possible without needing a huge savings account — but like anything big and important in life, there are still some "getting started" expenses.

Bottom Line:

A zero down payment loan helps you buy the home without cash toward the purchase price. Closing costs are about finalizing the deal and setting everything up the right way — and we have strategies to help you handle them without breaking the bank.

If you have questions about how much closing costs would be for your situation — or how we could work together to keep them low — let’s talk! I can walk you through a personalized plan and even help negotiate seller concessions if you’re not sure where to start.

Your dream of homeownership is closer than you think — don't let closing costs scare you away.