October 31st, 2018 3:58 PM by Jackie A. Graves
thinking about buying a home, you’re concentrating on beefing up your down
payment and lowering your monthly installments. But closing costs can
be an expensive and surprising fee if you don’t know how much they’re going to
To make sure
you’re prepared for closing costs, learn what they are, how much they can run,
and what you can do to lower them.
are closing costs?
of buying a home accrues many different costs other than the price of the home.
Fees that come from an inspection, an appraisal, and pulling your credit report
have to be paid. All of these and more are closing costs and get paid at the
While you can
avoid some closing
costs, you can’t bypass them all. Both buyers and sellers are responsible for
closing costs, but who is responsible for what is different.
sellers are typically responsible for paying the realtor commission and title
transfer fees. Buyers normally pay for lender, third-party, and homeowner fees.
agreements, you might have closing costs eliminated at the time of
closing, but they’re rolled into the total cost of the mortgage. This is
convenient if you don’t have the cash handy up front, but you’ll end up paying
more in the long run. No-closing-cost mortgages have higher interest rates, so
you’ll be paying interest on top of closing costs for months after you close on
You can negotiate some of your closing costs. On the
second page of your agreement — sections A and B — look for origination charges
and third-party fees. These services typically include the cost of pulling your
credit report, having an appraisal, flood certification, and tax services. You
can shop around for those and don’t have to settle for what your lender provides.
also offers room for haggling. Many different vendors offer title insurance and
if you live in a place where different companies offer different prices, you
can look around for the best cost. You can also look for other vendors to do the
home inspection, homeowners insurance, and survey.
You might be
a bit overwhelmed with the list of vendors that your lender gives you. They’re
required to give you one but it’s not necessarily comprehensive. There are
plenty of vendors available for you to negotiate with — you just need to find
to prepare for closing costs
closing costs can be expensive, especially if you aren’t prepared for them.
Reducing closing costs allows you to put more money towards your monthly
payments and any renovations or updates to the house.
and browsing other vendors and lenders can help lower the costs of fees. But
you might want to consider saving separately for closing costs. If your down
payment is in tact and you’ve got your monthly payments figured out, put any
extra cash to your closing costs. Maybe you get a hefty tax refund or start a
side-hustle to cover the extra cost. Cut out your major expenses and live well
below your means.
struggling to find extra cash for closing, talk to your lender or realtor about
ways to lower closing costs. Ask about folding the costs into your mortgage
payments. You might end up paying more in interest and in the long run, but
it’s better than not being able to close on your house.
Source: To view the
original article click here