Buying a house can be expensive. After all, for many people, it's the largest expense they’ll ever make. But that doesn’t mean you can’t save money at the closing table. In fact, savvy buyers can save hundreds–or even thousands–by carefully watching their closing costs.
Closing costs include those miscellaneous fees you will pay to your lender, title company, attorney or others involved in the closing process. They include lender processing fees, recording fees, escrows, prepaid interest, settlement fees and the costs of a survey and title insurance, among others.
According to Bankrate.com’s annual survey of closing costs, nationally, the average origination and title fees on a $200,000 mortgage total $2,732–and that doesn't include taxes, insurance or prepaid items such as prorated interest or condominium association assessments.
Not to worry. Here are some tips that will help you cut your closing costs.
- Shop around. Bank fees vary widely. Ask for details about required fees before you submit an application, and go over them carefully.
- Negotiate. Some bank fees--particularly those commonly called "junk fees," such as underwriting, administration and document preparation fees--can be reduced or waived by the lender. Just ask.
- Lower the cost of title insurance by requesting a copy of the seller’s policy and requesting a re–issue rate from the title company. Be sure to compare prices--title costs vary by company.
- Ask your seller to pick up some closing costs. In a slow market, you’ll have more leverage. Remember, however, that some loans limit how much a seller can pay.
- Avoid PMI. By putting down at least 20 percent, you can avoid the cost of private mortgage insurance.
For more information on cutting closing costs, or to learn about available properties in your area, call our CENTURY 21 V.J.F. Realty office today.
