Six Ways to Reduce Closing Costs on Your Mortgage Transaction
When you're buying a home, the down payment isn’t the only upfront cost to prepare for—closing costs can also add up quickly. These fees, which cover everything from lender charges to title services, usually range from 2% to 5% of the home’s purchase price. But the good news? There are several smart strategies to reduce those costs and keep more money in your pocket at the closing table.
Here are some helpful ways to lower your closing costs:
1. Compare Lenders
Not all lenders charge the same fees. A little shopping can lead to significant savings. Ask to receive Loan Estimates from the lenders & do a side by side comparison of their fees.
2. Ask the Seller to Contribute
In certain market conditions, sellers may be willing to cover a portion of your closing costs. This is known as a seller concession and can be negotiated during the offer phase.
3. Close at the End of the Month
Interest is typically paid from the day of closing through the end of the month. By closing near month-end, you reduce the number of prepaid interest days, potentially lowering your upfront cost.
4. Review the Loan Estimate Carefully
Your Loan Estimate breaks down every fee. Review it line by line and ask your lender about anything that looks high or unfamiliar—you may be able to negotiate or remove unnecessary charges.
5. Use a First-Time Homebuyer Program
Many state and local programs offer grants or closing cost assistance to first-time buyers. These programs can help offset or fully cover closing costs if you meet eligibility requirements.
6. Avoid Unnecessary Extras
Services like optional title insurance add-ons or courier fees might be negotiable. Ask your lender or title company what’s truly required—and what isn’t.
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