You’ve saved up the money for a down payment and are finally ready to make your dream of owning a home a reality. Congratulations! Buying a house is one of the most exciting – and one of the most 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, which 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.
In addition, a third party provider can perform some of the services required for closing. Take time to research options other than those provided by the lender for services such as pest inspection or title insurance. You’ll often find a lower price elsewhere.
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 that the fees listed on your Loan Estimate match those on the Closing Disclosure or have increased no more than the standard limit of ten percent if you’ve used the lender’s service providers. If they have, the lender is required to reimburse you the difference.
Ask if seller will share costs
Another way to save on your costs at closing is to ask if the seller would be willing to pick up a portion of the fees. While this is unlikely in a tight market and isn’t advisable in a bidding war, if a seller is particularly motivated they may agree. You will need to check with your lender, as some have caps on how much a seller can contribute towards the closing costs. You can either request to have the seller pay for certain services, such as the home inspection, or for a specific dollar amount. Ask your real estate agent what would be the best course of action in your specific 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. An agent with experience in your local market can help you through the closing process. They’ll take the time to explain the costs so that you understand, and help find ways to save you money in the long run. In the end, you’ll finally have that house you’ve always dreamed of, and at a price that fits well within your budget.
Buying a Santa Cruz county home is a long-term commitment. I want to partner with you to make sure you’re able to both keep and enjoy that commitment. To learn more about homes in Aptos, Capitola, La Selva Beach, Rio Del Mar, Santa Cruz and Watsonville call (831) 247-3803 or contact me via email to schedule a personal consultation.
Thanks for reading & have a great day in Santa Cruz County or wherever you call home!