You’ve saved up the money for a down payment. It’s finally time to make your dream of owning a home a reality. Congratulations! Buying a house is one of the most exciting – and stressful – events in your life. If you’ve done your due diligence, you’ve shopped around for a mortgage and secured a great interest rate. But did you know it’s also possible to save money on your closing costs? Here’s how.
Lenders are required to provide you with a three-page Loan Estimate that includes your closing costs. These are fees that generally add up to as much as five percent of the purchase price. You can use these estimates to shop around and potentially save yourself thousands of dollars. You can also negotiate to have one lender match the lower closing costs of another.
If you’re already under contract to purchase a home, be sure to notify your Realtor if you decide to change lenders. There are contractual financing terms and deadlines that must be met.
Take time to compare other costs including closing attorneys, pest inspectors (CL-100) and title insurance providers.
Evaluate and negotiate
Once you’ve received the Loan Estimate, go over it in detail. Ask the lender what each fee covers. This is a good way to discover if the estimate has been padded with unnecessary or redundant fees. At this point, you can negotiate to have some of these fees reduced or removed.
Three days prior to closing, you will receive a Closing Disclosure. Double check to verify the fees listed on your Loan Estimate match those on the Closing Disclosure. If they’ve increased more than the standard limit of 10 percent, your lender is required to reimburse you the difference.
Ask if seller will share costs
Another way to save is to ask if the seller would be willing to contribute to your closing costs. This request would be part of your offer terms. It isn’t advisable to ask if you suspect there will be multiple offers. But if a seller is motivated, he or she may agree. Check with your lender first, as some have caps on how much a seller can contribute toward the closing costs. You can also request to have the seller pay for certain services, such as the home inspection, pest inspection and/or HOA transfer fees. Ask your real estate agent for his or her recommendation on the best course of action for your situation.
Enlist the help of a pro
Navigating the home buying process can be daunting. That’s why it’s helpful to have a trusted professional at your side. A knowledgeable Realtor can help you through the closing process. They can help find ways to save you money in the long run.
Susan Matthews is a Realtor serving the greater Charleston area with Coldwell Banker Carolinas. Contact her for more info on selling your home.