CalculatorHow to Get Closing Costs Waived or Reduced
TL;DR— Quick Summary
- Ask the seller for concessions up to 6% on FHA or 3% to 9% on conventional
- Negotiate lender origination, processing, and underwriting fees
- Lender credits trade a higher rate for cash toward closing costs at closing
- No-closing-cost loans make sense if you plan to sell or refinance within 5 years
- Shopping 3+ lenders can save $2,000 or more on the same loan
How to Get Closing Costs Waived or Reduced
Quick answer: You can reduce closing costs by asking the seller for concessions (up to 6% on FHA), negotiating lender fees, using lender credits (higher rate in exchange for cash at closing), choosing a no-closing-cost loan, or applying for first-time buyer assistance programs. Shopping 3+ lenders can save $2,000 or more on the same loan.
None of these eliminate costs entirely — they shift when and how you pay.
Quick savings checklist:
- Get 3 Loan Estimates — save $1,500 to $2,600
- Ask seller for 2% to 3% concession — save $6,000 to $9,000 on a $300,000 home
- Negotiate origination fee down by 0.25% — save $675 on a $270,000 loan
- Close near month-end — save $400 to $900 in prepaid interest
- Apply for local DPA — save up to $40,000 to $50,000 if eligible
Ask the Seller for Concessions
The fastest way to cut your out-of-pocket closing costs is a seller concession written into your purchase offer.
How to structure the ask:
- Request a specific dollar amount: "Seller to credit buyer $10,000 at closing"
- Or a percentage: "Seller concession of 3% of purchase price"
- Tie it to a strong offer — full price or quick close makes sellers more willing
Limits by loan type:
| Loan type | Max concession |
|---|---|
| FHA | 6% |
| Conventional (<10% down) | 3% |
| Conventional (10%–25% down) | 6% |
| Conventional (25%+ down) | 9% |
| VA | 4% (certain items) |
When sellers say yes: Buyer's market, home listed 30+ days, seller needs to move, or your offer is otherwise the strongest. On a $320,000 home, a 3% concession saves you $9,600.
See who should pay closing costs for the full buyer vs. seller breakdown.
Negotiate With Your Lender
Not all closing costs are set in stone. Some lender fees are negotiable.
Negotiable fees:
- Origination fee — often 0.5% to 1% of the loan; ask for a reduction or flat fee
- Processing fee — typically $300 to $900
- Underwriting fee — typically $400 to $900
- Rate lock fee — sometimes waived
Non-negotiable fees:
- Appraisal — set by the appraiser ($400 to $700)
- Credit report — third-party cost ($25 to $75)
- Title insurance — regulated in many states
- Government recording fees and transfer taxes — set by state/county
- Prepaid property taxes and insurance — actual costs, not lender profit
Tip: Get a Loan Estimate from each lender and compare Section A (origination charges) line by line. A lender charging $2,500 in origination vs. another at $995 is a $1,505 difference on the same rate.
See why a seller would pay closing costs when seller concessions are not enough.
Use Lender Credits
A lender credit is cash the lender gives you at closing in exchange for accepting a higher interest rate.
How it works:
- You choose a rate above the "par" rate
- The lender applies the credit toward your closing costs on the Closing Disclosure
- Credits cannot exceed your actual closing costs or be used for your down payment
Break-even example on a $320,000 loan:
| Lower rate | With lender credit | |
|---|---|---|
| Rate | 6.5% | 7.25% |
| Monthly P&I | $2,023 | $2,183 |
| Closing costs | $9,600 | $0 (credit covers all) |
| Monthly difference | — | +$160/month |
Break-even: $9,600 ÷ $160 = 60 months (5 years)
If you sell or refinance before 5 years, the credit saved you money. After 5 years, the higher rate costs more.
No-Closing-Cost Loans: Are They Worth It?
A no-closing-cost mortgage uses lender credits to cover all closing fees. You bring only your down payment to closing.
The tradeoff: Your rate is higher — often 0.50% to 0.75% above market.
5-year cost comparison on a $280,000 loan with $8,400 in closing costs (3%):
| Standard loan at 6.5% | No-closing-cost at 7.25% | |
|---|---|---|
| Cash at closing | $8,400 + down payment | Down payment only |
| Monthly P&I | $1,770 | $1,910 |
| Extra paid over 5 years | — | $8,400 (same as closing costs saved) |
Over 10 years, the no-closing-cost loan costs roughly $16,800 more in interest than paying costs upfront — about double what you saved at closing.
When it makes sense:
- You plan to refinance within 3 to 5 years
- You need every dollar for the down payment
- You expect a raise or windfall soon
When it does not: You plan to stay 10+ years and can afford closing costs upfront.
First-Time Buyer Programs
State and local programs offer grants or deferred loans for down payment and closing costs.
How to find programs:
- Search your state housing finance agency website
- Visit HUD-approved housing counseling agencies — counselors know local programs
- Ask your lender about bond programs and DPA (down payment assistance) options
Example programs:
| Program | Max assistance |
|---|---|
| Virginia DPA | Up to $40,000 (down payment + closing costs) |
| Virginia DPA Pilot (2025) | Up to $50,000 |
| New York HOME program | Up to $80,000 |
| Rhode Island FirstGenHomeRI | $25,000 (down payment and/or closing costs) |
Most programs require income limits (often 80% of area median income), a HUD-approved homebuyer education course, and owner-occupancy.
Shop Multiple Lenders
Closing costs vary more than rates between lenders. Always compare at least 3 Loan Estimates.
Example: $300,000 purchase, $270,000 loan
| Lender | Origination | Third-party fees | Total closing costs |
|---|---|---|---|
| Lender A | $2,700 (1%) | $4,200 | $6,900 |
| Lender B | $995 flat | $4,500 | $5,495 |
| Lender C | $0 (with credit) | $4,300 | $4,300 (credit offsets origination) |
Difference between Lender A and Lender C: $2,600 — on the same home and loan amount.
Compare within 14 days so multiple credit pulls count as one inquiry on your credit report.
Loan Estimate tip: By law, lenders must give you a Loan Estimate within 3 business days of your application. Compare Section A (origination), Section B (services you cannot shop), and Section C (services you can shop). Section C is where title and survey fees appear — and where you have the most room to save.
Rolling costs into the loan: On a purchase, you generally cannot finance closing costs into the loan balance (unlike a refinance). VA loans allow the funding fee to be financed. FHA allows some fees to be covered by seller concessions but not added to the loan amount.
Frequently Asked Questions
Can you get closing costs waived?
Not fully waived — but seller concessions, lender credits, and assistance programs can reduce or eliminate your out-of-pocket closing costs.
What is a no-closing-cost mortgage?
A loan where lender credits cover closing fees in exchange for a higher interest rate — typically 0.50% to 0.75% above market.
Are lender credits worth it?
Yes if you keep the loan fewer than 5 years. Divide the credit amount by the monthly payment increase to find your break-even point.
Which closing costs are negotiable?
Lender origination, processing, and underwriting fees. Appraisal, title, government fees, and prepaids are generally fixed.
Can closing costs be rolled into the loan?
On a purchase, most costs must be paid at closing — but VA funding fees and some lender fees can be financed. Refinance closing costs can often be rolled into the new loan balance.
Ready to compare closing cost estimates? Get free quotes through LendingTree to see what lenders charge and find the best deal.
About the author
CalculatorBasics Financial Team researches mortgage, lending, and calculator strategy topics with a focus on practical decisions and transparent assumptions.