There are a few options that may help you save money on closing costs.
Studies show that the closing costs, which can average two to three percent of a total home purchase price, are often more costly than many buyers expect. But there are some ways to save:
- Negotiate with the seller to pay all or part of the closing costs. The lender must agree to this as well as the seller.
- Get a no-point loan. The trade-off is a higher interest rate on the loan and many of these loans have prepayment penalties. But buyers who are short on cash and can qualify for a higher interest rate may find a no-point loan will significantly cut their closing costs.
- Get a no-fee loan. Usually, though, these fees are wrapped into a higher interest rate though it will save you on the amount of cash you need upfront.
- Get seller financing. This kind of arrangement usually does not entail traditional loan fees or charges.
- Rent the property in which you are interested with an option to buy. That will give you more time to save for the upfront cash needed for the actual purchase.
- Shop around for the best loan deal. Each direct lender and each mortgage brokerage has their own fee structure. Call around before submitting your final loan application.
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- First-Time Homebuyer's Guide: Main Page
- Part 1: Evaluate Your Life and Finances
- Part 2: Shop for a Loan
- Part 3: Find a House
- Part 4: Close the Deal
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Keywords: home, real estate, closing cost, financial strategy, mortgage, lender, loan, bank, seller financing, broker
