by Lina Martinez
Are you in the market to buy a new home? This can seem like a daunting process and it may be the most expensive and emotionally charged purchase of your life. However, with thorough research and determination, the keys to that dream home can be yours.
Take advantage of this house payment calculator from Redfin which can help you to figure out what your monthly payments would be on a fixed-rate mortgage. The calculator also takes into account property tax, homeowner's insurance, and private mortgage insurance (PMI) information to provide you with the most accurate calculation possible of what your mortgage payments would be.
Closing costs are the final step between home buyers and their new homes, and it can represent a huge chunk of money. Closing fees run between 3% and 6% of the mortgage. You can save hundreds of dollars, even thousands, by understanding how you to save on closing costs. That money could be better spent going into your home, as opposed to on your home loan. Here are the best ways to take control of the situation and save money on closing costs!
When shopping for a mortgage loan, the interest rate isn’t the only thing to consider. Some lenders charge fees to process mortgage loans, which can increase your closing costs enough to cancel out a slightly lower interest rate. Shop around for a lender who offers the lowest closing costs. You can also ask a lender to match low closing costs offered elsewhere.
Ask the seller for assistance:
In some cases, the sellers will be willing to lower the sale price of the home to offset the sting of closing costs. Others may be willing to cover some of your closing costs. Depending on the market and the home, a seller might contribute money toward your closing costs.
Close at the end of the month:
One of the easiest ways to reduce closing costs as a buyer is to schedule your closing at the end of the month. For example, if you close at the beginning of the month, ie. July 3, you have to pay the per diem interest from the 3rd to the 31st. But if you close on the 29th, you pay for only two days of interests.
Some banks offer existing customers incentives on their mortgages. For example, Wells Fargo’s My Mortgage Gifts program rebates eligible borrowers $500 on a home purchase or $300 for a refinance. Eligible Bank of America Preferred Rewards members can save from $200 to $600 on the origination fee.
Although there are thousands of ways you would rather spend your hard-earned money, closing costs are a necessary step to home ownership. Ultimately, it’s best to focus on how to reduce your closing costs so you aren’t paying more than you must.