March 11th, 2016 1:51 PM by Jackie A. Graves
scouted out the best mortgage rate and fought hard to get the best price on
your new home.
bargaining shouldn't stop there.
save hundreds of dollars on your closing costs just by shopping around.
most recent Closing Costs Survey found the average fees due at closing for a
$200,000 home now top $2,500, up nearly 6% from the previous year.
costs paid to third parties for such things as appraisals and title insurance
inched down from $672 in 2013 to $662 in 2014, origination fees, which are paid
to the lender, climbed from $1,730 to $1,877.
still stand a good chance of paying less when closing time rolls around if you
follow these 8 smart moves.
1. Determine which services you can shop
looking to save on closing costs, your starting point should be the three-page
Loan Estimate every lender is required to provide within three days of applying
for a mortgage.
At the top
of Page 2, the Loan Estimate details which "Services You Can Shop
For," such as title insurance and pest inspection, and which
"Services You Cannot Shop For," such as the property appraisal.
is required to give you a list of settlement service providers, but there's no
requirement that you use them.
find a reputable alternative, the lender will typically accept it.
2. Pick your settlement company.
on where your new home is located, you'll find settlements are handled by title
insurance companies, escrow companies, real estate brokers or attorneys.
estate agent or lender is likely to suggest that you use an in-house or
affiliated settlement firm. But you aren't obligated to do so. You might find a
better price with an independent settlement company.
shopping for any service, it's important to find the right fit for you,"
says Diane Evans, president of the American Land Title Association.
suggests you talk to family members, friends and neighbors to help find the
right service providers who understand your situation and location.
to understand which prices are locked in and which can change.
If you use
a company recommended by your lender, your title services, lender's title
insurance and owner's title insurance can't increase by more than 10% at
if you chose to use service providers not listed in the Loan Estimate, there's
no limit on how much the costs could rise.
4. See if you can recycle and reuse.
the title reissue rate. That's a discount on the cost of an owner's title
insurance policy. If the sellers purchased their home within a certain period
of time — often it's 10 years — and bought owner's title insurance, ask for a
copy of their policy.
you should be able to get a discount on the price you pay.
lender and title insurance company are amenable, you also may be able to avoid
paying for a new survey if you go back to the company that did the previous
survey and ask for an update.
5. Use your online and social media
social media and the Internet for almost every aspect of your life, so why not
use them to help you find a settlement company or service provider?
Facebook for recommendations, and share that with companies you're approaching.
You might be able to get a better price that way.
Angie's List and with the Better Business Bureau to see what companies get high
house can you afford?
the first thing you need to decide before you even begin to hunt for a new place
to live. No one wants to be house poor, saddled with mortgage payments that
gobble up too much of their paycheck. Follow these 5 smart moves, and you'll
find the price range that fits your budget.
6. Ask the seller for help with closing
feeling cash-strapped, you can ask the seller to help pay all or part of your
they'll start by offering to pay for certain services, such as a home
inspection. But you're better off requesting a specific dollar amount. Check
with your real estate agent for advice on what to request.
lender may have limits on how much the seller is allowed to contribute.
7. Close near the end of the month.
you're eager to get into your new home, but closing toward the end of the month
will save on prepaid interest.
With a new
loan, you need to prepay interest that accrues from the closing date to the end
of the month. So if you close on March 16, you'll have to pay for 15 days of
on March 30, you'll only pay interest for March 30 and 31.
8. Make sure the costs on your Loan
Estimate and settlement papers match.
Be sure to
check the Loan Estimate against the Closing Disclosure you must receive three
days before finalizing your mortgage.
find that settlement charges that aren't supposed to increase have risen, or if
those that are allowed to rise by 10% have increased by more than that, the
lender must reimburse you within 30 days of closing.
those limits aren't in force if you've hired your own service providers, so
you'll have to hold them to the prices they quoted you.
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