Seven Ways to Save Money on Closing Costs

Costs scattered across the process of buying a house associated with the purchase or re-finance of a property are defined as closing costs.

1. Compare Offers

When doing a home purchase or re-financing, the tendency is to shop for the best possible mortgage rate. You should not stop there. Look all third-party vendors and see their offers. By getting competing offers for home inspections and surveys, it ultimately saves you money instead of just going with the first offer.

2. Be on the Lookout for Low Ball Offers 

When looking and comparing closing cost estimates, be skeptical of figures that seem especially low. If it is too good to be true, it likely is.

3. Use the Same Lenders and Title Insurance

Using the same title insurance or lender that worked with your initial transaction could save you significant sums of money in your transaction. More importantly, it may also save you a lot of time.

4. Ask Questions

If something looks questionable or you do not understand the reason for a charge, you should ask about that particular issue. That one question or several questions on why a certain line item cost is on your closing statement could save you money.

5. Negotiate

Mortgage rates can be negotiated but should not be the only point you attempt to negotiate with your lender. The payment of any and all closing costs should also be an important negotiation with your lender.

6. Time the Closing of the Sale Appropriately

If you close at the end of the month, you can avoid prepaid interest charges. Whether the cost is substantial or minimal, your closing costs can be reduced by planning ahead and scheduling your closing toward the end of the month. When reviewing your good faith estimate, and pre-HUD (Home not attached to the land), pay close attention to the line that contains the first month’s interest that you pay in advance. A majority of originators will account for only a few days of interest – so if you close at the start of the month that figure could increase dramatically.

7. Be prepared to Walk Away

Reviewing all the closing cost documents prior to closing is important. At the closing table, if you notice that the fees have changed you should inquire why they changed. If the change in fees can’t be justified, then be prepared to walk away from the transaction.

Buying a house is a big step in the next chapter of life. It is also one of the most expensive moments in your life. Being able to save as much money as you can when it comes to closing costs can make or break the bank.

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