What Happens If I Don’t Have Closing Costs When Buying a House in Minnesota? (2026 Guide)

If you’re thinking about buying a home, you may have already heard about closing costs…

And that leads to a very real concern:

“What happens if I don’t have closing costs?”

Because even if you’ve saved for a down payment…

Closing costs can still feel like a surprise.

You might be wondering:

• Can I still buy without closing costs saved?
• Will this stop me from getting approved?
• Are there ways around it?
• Do I need to wait and save more?

The truth is:

Not having closing costs saved does NOT automatically stop you from buying a home in Minnesota.

But…

You do need a strategy.

The Short Answer

If you don’t have closing costs:

You still have options like:

• Seller-paid closing costs
• Down payment assistance programs
• Lender credits
• Gift funds

Many buyers:

Don’t pay full closing costs out of pocket

Some pay very little

First, What Are Closing Costs?

Closing costs are:

Fees required to complete your home purchase

They typically include:

• Loan fees
• Title and escrow fees
• Appraisal
• Taxes and insurance setup

Typical Cost in Minnesota

Around:

2%–4% of the home price

Example:

• $300,000 home = $6,000–$12,000

This is separate from your down payment

Why Closing Costs Feel Like a Problem

Most buyers plan for:

Down payment

But not:

Closing costs

So when they find out:

They feel stuck

But here’s the reality:

There are multiple ways to handle this

Option 1: Seller Pays Your Closing Costs (VERY COMMON)

This is one of the most powerful strategies

You can negotiate for the seller to pay:

Part or all of your closing costs

How It Works

When you make an offer:

You include a request for seller concessions

Example:

• Purchase price: $300,000
• Closing costs: $8,000
• Seller agrees to pay $8,000

Result:

You don’t pay those costs out of pocket

Important

This depends on:

• Market conditions
• Strength of your offer

But it is VERY common

Option 2: Down Payment Assistance Programs

Minnesota offers programs that help with:

• Down payment
• Closing costs

Some programs provide:

Thousands of dollars in assistance

This can:

Cover part, or even all, of your closing costs

Who Qualifies?

Often:

• First-time buyers
• Moderate-income buyers

Requirements vary

But many buyers qualify

Option 3: Lender Credits

Your lender can offer:

Credits toward your closing costs

How It Works

In exchange for:

A slightly higher interest rate

The lender covers:

Some of your upfront costs

Example:

• Closing costs = $8,000
• Lender credit = $5,000

You only pay the difference

This is a trade-off strategy

Option 4: Gift Funds

Family can help cover:

• Closing costs
• Down payment

This is very common

As long as:

It’s documented properly

(Gift letter + transfer records)

Option 5: Combining Strategies (What Most Buyers Do)

Many buyers don’t rely on just ONE option

They combine:

• Seller credits
• Assistance programs
• Gift funds

Result:

Very low out-of-pocket cost

A Real Situation I See All the Time

A buyer says:

“I have enough for the down payment, but not closing costs”

We look at their options:

• Seller pays part of closing costs
• They qualify for assistance
• They use a small amount of savings

Their total out-of-pocket:

Much lower than expected

They move forward

Without waiting years to save more

What Happens If You Do NOTHING

If you don’t plan for closing costs:

And don’t use any strategies

You may:

• Delay buying
• Miss opportunities
• Feel stuck

But the issue isn’t:

Lack of money

It’s lack of strategy

What Lenders Will Look At

Even if you don’t have closing costs saved:

Lenders still evaluate:

• Credit score
• Income
• Debt-to-income ratio

If you qualify:

They can help structure your loan

Including:

Closing cost solutions

When You SHOULD Have Closing Costs Saved

In some cases:

Having your own funds helps

Especially if:

• The market is competitive
• Sellers are not offering concessions
• You want a stronger offer

More cash = more flexibility

But it’s not always required

Minnesota Market Reality

In many Minnesota markets:

Seller concessions are still possible

Especially depending on:

• Price range
• Location
• Market conditions

This creates:

Opportunity for buyers

Biggest Mistakes to Avoid

❌ Assuming you can’t buy without closing costs

You likely have options

❌ Not asking about assistance programs

You could be missing out

❌ Not negotiating with the seller

This is a key strategy

❌ Waiting too long to talk to a lender

This delays clarity

These mistakes can:

Keep you stuck unnecessarily

The Smart Approach

If you don’t have closing costs saved:

Do this:

Talk to a lender early

Understand your options

Work with an agent who negotiates

Seller credits matter

Explore assistance programs

You may qualify

Build a strategy

Combine multiple solutions

This is how buyers succeed

FAQ: Closing Costs and Buying a Home

Can I buy a house without paying closing costs?
Yes, if the seller, lender, or programs help cover them.

How much are closing costs in Minnesota?
Typically 2%–4% of the home price.

Can the seller pay my closing costs?
Yes, this is often negotiated.

Are there programs to help with closing costs?
Yes, Minnesota offers assistance programs.

Do I need any money at all?
Usually yes, but it may be much less than you think.

Final Thoughts

Not having closing costs saved does NOT mean you can’t buy a home…

It just means you need the right strategy

Because in today’s market:

Buyers don’t just rely on savings

They use:

• Negotiation
• Programs
• Smart financing

When you understand your options:

The process becomes much more realistic

You don’t need to wait…

You just need a plan

Next Step

If you want to find out how to buy a home in Minnesota, even if you don’t have closing costs saved, the next step is to get a clear plan:

https://buy.dreamhomesminnesota.com/

This will help you:

• Explore your options
• Understand your numbers
• Move forward confidently

Lesley The Realtor
Real Estate Agent in the Twin Cities & Surrounding Metro, Minnesota
Helping buyers overcome financial barriers and find smart ways to become homeowners