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Reducing Closing Cost, How Buyers Can Take Advantage

reduced closing cost1

Mortgage closing costs have been coming down in recent years, which is good news for buyers. But if you’re buying a home in the near future, you’ll want to ensure you’re prepared to take full advantage of these lower fees, after all keeping more money in your pocket is always good. When you close on your mortgage, take these three steps and you’ll find that you’ll pay far less in closing fees than most buyers would.

Negotiate Fees That Look Sketchy
reduced closing cost2Just because a fee is listed on your mortgage closing agreement, that doesn’t mean you have to pay it. Some fees are “junk” fees that can find their way into a contract when they aren’t entirely necessary.

If you see terms like “loan origination fee”, “commitment fee”, “courier fee”, “email fee”, or “sign-up fee”, challenge them. Chances are, you can knock a few hundred dollars off your closing costs just by negotiating closing costs.

Ask The Seller to Pay Some of the Closing Costs
In most situations, the buyer is responsible for paying all closing costs, as that’s been the industry standard agreement. But just because that’s what usually happens doesn’t mean you need to pay all the closing costs on your new home.

Negotiate with the sellers to see if they’d be willing to cover some of the closing costs. If you want to make a deal like this, though, you may have to add extra incentives for the sellers to agree to it. Tell the sellers that they can choose any closing date they wish, or offer to accept the home “as-is” rather than requesting repairs.

Use The Money You Save For an Extra Annual Paymentreduced closing cost3
With lower closing costs come savings that you can either pocket or spend. One great way to leverage lower closing costs is to use the amount of money you saved with reduced closing fees as an extra mortgage payment.

Most lenders will allow you to make one extra lump sum payment per year without penalty, and by making this extra payment every year, you’ll save on interest payments. So use the money you saved in closing costs as part of an extra payment to reduce your debt load.

Reducing your closing costs, and taking advantage of the lower fees, is easy if you know what you’re doing. A mortgage advisor can help you to understand what closing fees are legitimate and how you can budget for success.

moo thorpe headshotFor more helpful tips please contact me at 505.780.0310, or email me at moo@moothorpe.com and I will be happy to assist you.

Whether you are selling your home, or buying a home, I can help you with your endeavor.

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