How to Keep Your Closing Costs Low

Closing costs can surprise many homeowners if they are not prepared and can significantly reduce savings at a time when many people are in dire need of money. It seems that lenders are constantly finding new and creative ways to spend a few dollars here, as well as a few dollars when they reach thousands. However, by taking a few simple steps, you can keep your closing costs low and know when to tell your lender that it is enough! First, you should always be an informed consumer when it comes to title work. You have the right to choose any title deed you want and not the one that the lender wants to force you to. Of course, the mortgage company they want you to use always becomes one of the most expensive (because it gets the kickback). Buy near a title dealer, and you can save 30% right away, and if you really intend to work for it, save more than 50%. It’s not a chump change either - a company with a title can easily charge $1,200 for basic title services. Next, beware of unwanted payments. Lenders like to accumulate documents to repair documents, interest rates and anything else they can think of. Many times they throw these moneys into debt with no points attached to it. Make sure you ask your lender to fully disclose all payments and ask him or her about anything that seems out of line. If you are not happy with what they are quoting, tell them you are looking around for other lenders. The last thing a lender wants to do is to lose 30 years of interest over $200 trash! If you have not been in the house for more than a few years, ask the seller to pay the closing costs. Of course, you will end up paying higher interest rates, but if you plan to move in a few years the interest rate will not be commensurate with the closing costs you have to pay in advance. Also, you pay extra interest on small lumps every month rather than having a lot of money before. Beware of lenders who try to sell you extra products on your loan. They like to try to get you to buy credit (the amount of money wasted) and some lenders even try and sell you services such as “plumbing protection” or “home security”. Just say no! Remember, you have the power to say no thank you at any time before you sign on the dotted line. If you do not like the mortgage rates you are talking about closing costs, buy everywhere - in fact, you should go around and get loan offers before you can consider it. Do not be afraid to get up and walk around the table. After all, it's your money - don't let a greedy lender try to get you another $1000 if you have enough pressure to buy a home in the first place!