How to Save on Closing Costs

Buying a home in this market means opening the door to a multitude of opportunity. As real estate costs continue to dip for sellers, buyers are reaping the rewards, finding deep discounts on previously expensive properties. Despite the market shift, think twice when adding up the bottom line. Closing costs, or the out-of-pocket expenses required to complete the sale of a home, can pack a large punch. While you may be able to afford a 30 year mortgage, writing a check for the closing costs could be another story. Follow the tips below to cut back on expenses the day you take possession. Closing should be a day of celebration.

  • Get the facts early. A good faith estimate is given to buyers within three days of completing their mortgage application. This document outlines the total fees related to processing the mortgage. Complete your application as soon as possible to get the facts early. Review the closing costs with your lawyer and ask about any fees you do not understand. You may be able to negotiate a lower price before closing day.
  • Reduce the fees. Speaking of negotiations, discuss any fees that are added to the total price of your loan. Ask why these fees are being assessed. If you aren’t met with a good answer, lobby to eliminate them from the agreement. A little assertiveness could save you big money over time.
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  • Shop around for title insurance. The cost to insure your home title can be steep, rising to the mid-five figures depending on the price of your home. The good news? Paying title insurance is mandatory, but settling for a ridiculous markup is not. Before closing, shop around for the best title fee available. Discounts are available to those who look.
  • Say “no” to superfluous fees. Brokers and lenders know how to line their pockets. The shadier breed will add to their wallets by including additional “processing” and “administrative” fees into the closing price. Work with a team you trust to avoid these unsavory tactics. You have the right to secure a fair deal.
  • Write it in stone. A closing agreement is only reliable after the final changes are made. Ask to see the final HUD-1 document before the closing day. While you may have seen a draft after submitting your application, the final version is the one you’ll be paying for. Review it with the tips above in mind and submit any last-minute questions or concerns. The time for haggling is not at the closing meeting—have your agreement written in stone before signing.

This article was provided by Lexington Law, a credit repair firm that helps people address their credit score issues.

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