Closing Costs: How to Pay Less

Everyone knows that if you’re buying a house, it will cost you more than what you bid on houses for sale you take an interest in. You’ll pay for appraisals, credit reports, title insurance, and what are known as ‘closing costs’ – the fees paid to the lender which covers their processing expenses. Many market watchers and prospective home buyers have been alarmed by the increase in closing costs associated with properties for sale in the last few years since the mortgage crisis.

The major reason for the increase in closing costs in the last few years has been the increase in government regulations regarding lender’s practices, in an effort to ensure that loans are fair to the consumer. Ironically, houses for sale are more expensive over all because the government is trying to get you a better loan.

Even though there’s not much to be done about the overall increase in closing costs on properties for sale in the current market, there are ways that you as a prospective home buyer can save money. Consider these tips before you look into buying houses for sale.

• Closing costs can vary significantly from one lender to another, so shop around for the most reasonable lender.  In one state alone, studies have shown that closing costs can vary as much as several thousand dollars. Save money by requesting GFE (Good Faith Estimates) from three or more lenders when you apply for a mortgage. This will show you the up-front costs of closing with a particular broker or mortgage company before you buy properties for sale. If you prefer to stay with a more expensive lender for other reasons, you can still save money if you negotiate pricing.
• Shop around for title insurance. Although in some states title insurance costs on homes for sale aren’t negotiable, it never hurts to ask. Some states’ costs vary throughout the state, so it pays to shop around with several lenders to see which one offers the best title insurance rate. Again, even if you want to stay with a particular lender, negotiating is more effective if you have specific company names and estimates to refer to, as this puts more pressure on the lender to keep your business.

Whatever the closing costs on interesting houses for sale, don’t underestimate the power of shopping around to get the best possible deal on this necessary part of the process to owning your dream home.

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