A lot of homeowners believe that the closing costs have got to be the most inconvenient part of buying a home. They could go well into the thousands, sometimes in tens of thousands, on top of the price that the house came in. A fairly inexpensive house could cost more than it should on the part of the mortgage applicant because of the commission and the closing costs.
While some new homeowners or first-time investors resort to carrying the costs over to the total amount of the mortgage, the arrears that might build up from it makes it a much heavier burden than actually paying it outright. Not to mention, it helps extend your mortgage terms to a longer time.
While they are inevitable, there are ways that real estate experts advise on how to save on closing costs. Here are the tips:
- Shop around for the right lender. Some real estate brokerage firms are partners with certain banks and lending institutions. They would tell you to automatically get your mortgage in their partner institutions. But if you don’t know that already, you have the choice. Some lenders offer their other closing services more cheaply or give you the option to get other services outside of their institution and that would help you save more.
- Get your GFE promptly. Each lender you apply to is required by law to give you the Good Faith Estimates (GFE) for all costs including the closing costs. Don’t hesitate to ask for it because it is rightfully yours and it will help you see which among the inclusive costs you could try working on yourself to save some. Compare GFE’s from different lenders to see which ones best suits your budget.
- Don’t hesitate to ask. Ask your financial consultant about things that you cannot understand. For example, if you are buying a property or a condominium such as the luxurious Arcoris Mont Kiara, note that here may be costs that are not too familiar to you that are actually easy to bargain on or you can do yourself sans to save up on extra expenses. Knowing what each item on your GFE will greatly help you decrease your costs.
- Shop around on other services (i.e. title services). There are closing cost services that actually have to be done by you. Title services are one of them among a few others. Other settlement costs are also part of this. Just as when you are looking for the right lender to go to for your mortgage needs, also go shop around for the right institutions to get these services from. Stopping with one can help you lose some valuable savings from your closing costs.
- Avoid schemes that offer “no closing costs”. A real estate deal can never be without closing costs – getting your home in your name, getting your papers notarized, etc. – these are all part of closing the deal and without them, your whole real estate and mortgage end up in forfeit. That, or they might mask the closing costs as part of the total selling price of the house.
You don’t need to distress over closing costs. Find ways to lessen the costs and you’ll have a fairly better time. Good luck!