Tips on keeping your closing costs down

posted in: Home Purchase 0


Purchasing a home requires a whole lot of time, effort, and funds. This includes a large commitment and possible sources of frustration, especially if you happen to be a first-time homebuyer. Most of the stress stems from acquiring proper financing while trying to obtain the best and lowest possible rates. There are a few steps you can take in order to make the process as seamless as possible:

Shop for Lenders

Consult, compare, and only when you are comfortable, commit. Just as you look for the best property it’s also a good idea to shop around for the right lending companies before zeroing in. Consult several lenders and get details on their initial estimate of the costs and terms of the loan, and then proceed to compare before finally committing to one.

Organize, Keep Track, and Maintain

In the months leading up to your home purchase, collect and organize all of your financial documents such as pay stubs, bank statements, tax returns, and other related documents. Make sure they’re properly arranged in order to provide them to the lender. The less work in sorting out the details you can spend the quicker you will be to getting an approval. Also keep track of your finances, or better yet, just control the movement of your money—whether it’s in spending, transferring from accounts, and so on. Lessen your headache when it comes to the paper trail and give a good insight to your finances so that the lender can see your ability to pay. Lastly, it is important to maintain your credit profile. Don’t do anything that could hurt your credit score in any way, such as opening or closing credit cards, making a huge purchase that you have to pay off (e.g. new car), etc.

Closing Costs

The closing costs for 2014 rose to about 6 percent. This may not seem much percentage-wise, but it represents a huge amount of money involved. More often than not, buyers/borrowers come out of pocket more heavily because of the wide range of closing costs. Besides keeping track of every transaction of each required closing cost, it’s recommended to first check if the amount can be waived, charged to the seller, or negotiated for a much lower cost instead.

Special Programs

Just as a precautionary measure, first check to see if you qualify for a special program that helps with mortgage costs. These special loan programs include VA loans, FHA loans, USDA loans, or even a local first-time homebuyer program.

Even with these tips, the best move is to find a credible and reliable mortgage company that provides you with topnotch service. It’s all about being transparent, accommodating, and competent in assisting you with acquiring a loan with no hidden or excessive charges. Upon initial consultation, you should be able to get an idea of the best loan program that benefits your situation. Having a good company by your side and being knowledgeable yourself go hand in hand in securing the best and lowest mortgage rates for you.