Buying a home can be a daunting prospect. Verifying credit reports and scores, analyzing what it is you actually want in a home and assessing potential costs including the monthly mortgage loan payment, down payment and potential closing costs are all factors that can be deterrents to getting the home buying process started. However, partnering with a skilled mortgage professional can offer insight into each of these points to ensure you get the most home for your dollar and the best deal.
Closing costs are due at the time of settlement, so can present a concern for home buyers who may not have a lot of cash on hand. These costs include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed-recording fees and credit report charges, and it is possible to reduce them so your financial responsibility at the time of closing on your new home is decreased. Read on for a few options:
It is possible, in the case of a home purchase, that the seller can cover part of the closing costs. This exchange can only go towards to closing cost, not the buyer’s down payment responsibility.
The negotiation for this option happens during the sales price conversation. If the seller does cover part or all of the closing costs, the buy often accepts a higher loan amount/purchase price. This allows the home buyer to mortgage the closing costs across the life of the loan, and is a great option for a buyer who may be short on cash at the time of settlement.
Another option to decrease the closing costs due at settlement is to have your mortgage lender to assist. In this case, you would again take on a higher mortgage, based on the mortgage rate, to reduce your out-of-pocket closing costs. This kind of agreement would be part of a conversation during the mortgage application process.
You have choices for the differing vendors that provide the services that are included in your closing costs. With that in mind, you have the option to shop around for title insurance, home inspection and homeowner’s insurance companies to get the best rates.
At the end of the day, any way you can reduce your closing costs will reduce some of the stress you may have over your mortgage settlement, allowing you to enjoy the excitement of your home purchase that much more!