You’re probably aware of closing costs that come with a mortgage if you’re contemplating of buying a house. And of course, you’d want to keep those costs at a minimum. In most cases, closing costs could be up to 5% of the purchase price of a house, which is a significant sum. To try to lower your closing costs, consider these tips.
Review and Understand your Loan Estimate
Take ample time to read and understand every single item, ideally with your broker or lender, and ask what every fee specifically covers and how the costs were calculated so you could determine if there are unnecessary or padded fees, advises an experienced broker from PRMI Cascade, a top mortgage company in Seattle. Check if the fees have similar names or else you might be charged twice for the same thing.
Compare Each Cost
This is why shopping around and speaking to different lenders is vital. Doing so would help you compare different costs from different lenders. Aside from obtaining quotes from different lenders, you could likewise obtain quotes for specific services, like the title search, survey fee, pest inspection fee, etc., because you don’t necessarily need to go with the providers suggested by your lender.
Negotiate with the Seller
Depending on how motivated the seller is to close the sale as well as market conditions, the seller might be willing to help you reduce your closing costs. You could try negotiating for a lower purchase price to reduce your closing costs, or ask the seller to cover some fees in your closing costs.
Negotiate Some Fees with Your Mortgage Lender
Try to ask your lender if they could do away with vague fees from your final estimate—this is, of course, considering that there are vague fees. Get the Closing Disclosure document from your lender, which details your final closing costs and compare what’s on your Loan Estimate to this document, and if you see any discrepancies, ask your lender to explain everything to you more clearly.
While you could probably think of many other ways to spend your hard-earned money, closing costs are simply one of those steps you just couldn’t skip on your way to homeownership. Even if you don’t like them, you still need to pay for them. Just focus on lowering your closing costs because that’s all you can do.