Can Closing Costs Be Waived? 6 Ways Buyers Can Lower Costs at Closing

Key takeaways: 

• Strategies to “waive” closing costs usually involve shifting them to the seller, offsetting them with lender credits, or financing them over time.
• Taking a higher interest rate for a lender credit or rolling fees into your principal reduces your cash-to-close today, but increases monthly costs.
• Seller concessions depend on market dynamics and loan type caps, while local grants can provide non-repayable help for eligible buyers.

Closing costs can add thousands of dollars to the price of buying a home, often catching buyers off guard right before the finish line. Whether you’re browsing  or exploring , understanding these fees can help you plan for the true cost of buying.

While closing costs usually can’t be completely eliminated, there are legitimate ways to reduce them, shift who pays them, or effectively “waive” them through credits and assistance programs. In most cases, “waived” means the costs are covered or offset by another party, not erased entirely.

This Redfin article breaks down when closing costs can be waived and the most realistic strategies to lower or avoid paying them up-front.

What are closing costs?

Closing costs are the fees, taxes, and prepaid expenses required to finalize a real estate transaction. They typically range from 3% – 6% of the home’s purchase price and are paid at closing alongside your down payment to complete your total cash to close.

• Lender fees: Loan origination, processing, underwriting, and credit report fees.
• Third-party services: Appraisal, home inspection, survey, title insurance, and escrow or settlement fees.
• Prepaid expenses and government charges: Prepaid homeowners insurance, property taxes, daily prepaid interest, government recording fees, and transfer taxes.

Some of these costs are lender-controlled, some are third-party fees, and others are government-mandated, which affects how flexible they are.

Can closing costs actually be waived?

In most cases, closing costs aren’t truly “waived” or erased – but they can be covered, reduced, or rolled into other parts of the transaction. When buyers talk about waived closing costs, they usually mean one of the following:

• The seller pays them through negotiated seller concessions.
• The lender covers them in exchange for a higher mortgage rate (lender credit).
• They’re rolled into the loan balance (when permitted by loan guidelines).
• A grant or assistance program pays them on your behalf.

Understanding this distinction is important because each option changes where the cost shows up – either up-front, over time, or in the purchase price.

1. Ask the seller to pay closing costs (seller concessions)

One of the most common ways to reduce or avoid paying closing costs up-front is to negotiate seller concessions. This strategy shifts some or all of your closing costs to the seller as part of the purchase agreement, lowering the amount of cash you need at closing.

How seller concessions work

The seller agrees to cover a set dollar amount or percentage of your closing costs at settlement out of their sale proceeds. You can negotiate concessions directly in your initial purchase offer or request them as a credit following home inspection findings. Seller concession flow:

• Step 1: Buyer offers $400,000 purchase price.
• Step 2: Seller agrees to a 3% seller concession ($12,000 credit).
• Step 3: $12,000 credit is applied directly to eligible closing costs at settlement.
• Result: Buyer’s out-of-pocket cash to close is reduced by $12,000.

When seller concessions may be more realistic

Seller concessions are easier to secure in specific market environments:

• Buyer’s markets: High inventory gives buyers increased leverage.
• Properties on market 30+ days: Sellers with aged listings are often more willing to offer credits to seal a deal.
• New construction sales: Builders frequently offer closing credits in lieu of lowering base home prices.

Seller concessions are at record highs, with sellers offering credits in 44.7% of U.S. home sales as buyers gain more negotiating power. They are most common in Sun Belt markets like Atlanta and Nashville – where roughly seven in 10 buyers receive concessions – and least common in tight markets like the Bay Area and New York. Additionally, about 15% of buyers are landing a “double discount,” securing both a price cut and a seller concession toward closing costs.

Limits to seller concessions

Mortgage guidelines enforce caps on seller concessions based on loan type and down payment size:

Seller concessions can significantly reduce your cash-to-close, but they’re often offset by a higher purchase price or different negotiation terms.

2. Use lender credits (higher rate, lower up-front costs)

Another common way buyers “waive” closing costs is by using lender credits. Instead of paying all closing costs out of pocket, you trade a slightly higher interest rate for a credit from the lender that covers some or all of your up-front fees.

How lender credits work

You agree to a higher mortgage rate, and in return, the lender applies a credit toward your closing costs at closing. This reduces the amount of cash you need to bring to the table.

To see how this trade-off works in practice, compare a standard loan offer against a lender credit option on a typical $400,000 mortgage:

How to run the break-even

While a lender credit reduces your cash burden on closing day, it comes at the cost of a higher interest rate and a higher monthly mortgage payment. To decide whether taking a credit makes financial sense, you need to calculate your break-even point – the exact month where the cumulative cost of that higher monthly payment catches up to the up-front cash you saved.

If you expect to move, sell, or refinance before reaching the break-even point, taking the lender credit saves you money. If you plan to hold onto the mortgage well past that threshold, paying your closing costs up-front is usually the cheaper path.

You can calculate your break-even point with a simple formula: Break-even period (Months) = Up-front closing cost savings ($) ÷ Additional monthly payment ($)

Illustrative example: If a lender credit saves you $6,000 up-front but increases your monthly mortgage payment by $100, your break-even point is:

$6,000 ÷ $100 = 60 months (5 years)

If you stay in the home or keep the loan for less than 5 years, the lender credit saves you money overall. If you keep the loan longer than 5 years, paying costs up-front would have been cheaper.

When lender credits may make sense

• You’re short on cash up-front
• You plan to refinance or sell within a few years
• You value lower cash-to-close over the lowest possible rate

The trade-off is higher interest costs over time. Because of that, lender credits tend to work best for short-to-medium holding periods rather than long-term homeownership.

3. Roll closing costs into the loan (when allowed)

Some loan programs allow certain closing costs to be financed into the loan balance rather than paid out of pocket at closing. This approach can lower your up-front cash requirement, but it increases the amount you borrow, and typically your monthly payment. This is more common with:

• VA loans (especially for refinances)
• FHA Streamline refinances
• Certain renovation loans

For standard purchase loans, rolling closing costs into the loan is relatively uncommon and usually requires:

• The home appraising above the purchase price
• Staying within loan-to-value limits

While financing closing costs can make buying or refinancing more accessible, it’s important to weigh the higher loan balance and long-term interest costs against the short-term savings at closing.

4. Use down payment and closing cost assistance programs

Many state, local, and nonprofit programs offer grants or forgivable loans that can help cover closing costs, down payments, or both. These programs are designed to make homeownership more accessible and can significantly reduce the amount of cash you need at closing.

These programs are often available to:

• First-time home buyers
• Moderate-income buyers
• Buyers purchasing in specific areas

Assistance may cover:

• Closing costs
• Down payment
• Both

Some programs require:

• Income limits
• Home buyer education courses
• Living in the home for a set number of years

Availability and requirements vary widely by location, so it’s best to ask your lender or real estate agent about assistance programs early in the process, as they can affect timelines and loan eligibility.

5. Compare lenders and negotiate fees

Not all closing costs are fixed, and many buyers don’t realize they have more room to negotiate than they think. Lenders can charge different rates for the same services, and some fees – especially lender-controlled ones – vary widely from one Loan Estimate to another. 

Taking the time to compare offers and ask questions can significantly reduce your out-of-pocket costs at closing. You may be able to reduce costs by:

• Comparing loan estimates from multiple lenders
• Asking lenders to match or beat fees
• Questioning origination or processing fees
• Shopping for title and escrow services (where allowed)

Even small reductions can add up to meaningful savings.

6. Close at the right time

The timing of your closing can influence how much cash you need up-front. While it won’t eliminate closing costs entirely, choosing the right closing date can help reduce prepaid expenses – costs that cover interest, taxes, and insurance before your first mortgage payment is due. You may lower prepaid costs by:

• Closing later in the month (less prepaid interest)
• Choosing a time when property taxes or insurance payments are lower

These timing adjustments won’t remove closing costs, but they can reduce the total amount due at closing and make your cash-to-close more manageable.

What closing costs usually can’t be waived

While many closing costs can be reduced or shifted to another party, some fees are difficult, or impossible to avoid. These costs are typically set by government agencies or required by lenders and third parties, leaving little room for negotiation. Fees that usually can’t be waived include:

• Government recording fees
• Transfer taxes (where applicable)
• Required insurance premiums
• Certain third-party charges

Because these costs are mandatory, most “waived” closing cost strategies focus on who pays the fees rather than eliminating them altogether.

What if you still can’t afford closing costs?

If your estimated cash-to-close exceeds your available funds, take these structured steps before giving up on a transaction:

1. Revisit seller and lender options: Ask your agent to request a late seller concession credit or ask your lender to recalculate terms using a higher interest rate with an increased lender credit.
2. Layer local assistance: Check local HFA databases for emergency down payment or closing cost grants.
3. Ask for a clear cash-to-close breakdown: Request updated Loan Estimates comparing up-front cash required under different financing scenarios side by side.

Is waiving closing costs worth it?

Whether waiving closing costs makes sense depends on your financial priorities and how long you plan to own the home. While reducing up-front costs can make buying more accessible, it often comes with trade-offs that affect your long-term expenses. 

Waiving or reducing up-front closing costs can help if:

• You’re cash-constrained
• You want to preserve savings for repairs or emergencies
• You plan to move or refinance within a few years

Paying closing costs up-front may be better if:

• You want the lowest long-term interest cost
• You’re buying a long-term home
• You can comfortably afford the up-front expense

Weighing both the short-term cash savings and the long-term cost impact can help you choose the option that best fits your homeownership goals.

FAQ about getting closing costs waived

Is there a way to pay no closing costs?

Yes. You can achieve a $0 cash-to-close impact for closing costs by combining seller concessions, lender credits, or assistance grants. However, the underlying fees are paid by someone else or built into a higher mortgage rate rather than erased entirely.

What should you not say to a mortgage lender?

Avoid making false statements about your income, employment status, undisclosed debts, or the source of your down payment. Never state that gift funds are a loan that must be repaid. Always provide complete, accurate documentation, and feel free to negotiate on origination and administrative fees.

Will banks waive closing costs?

Some banks and credit unions may waive specific internal fees (like application or processing charges) as part of promotional offers or loyalty programs. However, banks rarely waive mandatory third-party fees (like title insurance or appraisals) without offering a lender credit offset by a higher interest rate.

Can I borrow money for closing costs?

Unsecured personal loans are generally not permitted as a source for closing costs under mortgage underwriting rules unless fully secured by a collateral asset. However, acceptable options include approved down payment assistance loans, forgivable second mortgages, or allowable loan programs that permit fee financing.

How do I ask for a lender credit?

Ask your loan officer: “Can you show me a scenario that includes a lender credit to cover my up-front closing costs, and tell me how much that changes my interest rate and monthly payment?” Compare this directly against standard rate quotes to calculate your break-even point.

The bottom line on getting closing costs waived

While closing costs rarely disappear completely, buyers can successfully minimize up-front cash requirements through strategic negotiation, lender selection, and program assistance. By weighing immediate cash savings against long-term interest expenses, you can choose the strategy that best aligns with your financial goals.