Learning how to lower closing costs when purchasing your home can save you a substantial amount of money. With closing costs accounting for a minimum of three percent of the mortgage loan, knowing how to save on closing costs can help you hold onto a few thousand dollars to buy new furniture or put it towards renovations you’re thinking about.
Tips for Saving on Closing Costs
In line with our commitment to give all our clients a memorable closing experience, we’ve provided the following tips on how to save money on closing costs.
Study the Loan Estimate Form
According to the Consumer Financial Protection Bureau, “a lender must provide a Loan Estimate to the consumer, either by delivering by hand or placing in the mail, no later than three business days of the receipt of an application. An application is considered received when the consumer provides the following information:”
- Consumer’s name
- Consumer’s income
- Consumer’s Social Security number to obtain a credit report
- Address of the property
- Estimate of the value of the propert
- The mortgage loan amount sought
The Loan Estimate gives you the opportunity to compare the closing costs from different lenders. It also makes it easy to evaluate costs once you’ve chosen a lender.
Make sure it’s the Loan Estimate you get and not the fee itemization form or the worksheet of closing costs. The Loan Estimate is a legally binding document.
Discover Where Your Savings Are Hiding
At the bottom of the initial page of the Loan Estimate form, you’ll find a summation of the closing costs. You can also see the total amount of cash required to close the deal.
The services that you can shop to save money are located in Section C and H, which include:
- Survey costs
- Home inspection
- Pest inspection
- A title search
- Title insurance for both you (Owner’s Title Insurance) and the lender (Lender’s Title Insurance)
- The Settlement or Closing Fee
Negotiate or Avoid Some Lender Fees
Your lender may decide to charge a single fee that contains various services, including underwriting, while others charge separately for each service. When you see more than two or three line items that are listed as charges to the mortgage company, you need to be cautious and ask questions.
Fees like “underwriting” or “originating” are normal. However, fees such as “delivery fee” or “funding fee” are arbitrary and need an explanation. If you see these ambiguous names, you need to get an explanation for them. If the lender refuses to drop these fees or reduce their value, you may want to look for another lender.
Use a “No Closing Costs” Mortgage
This choice provides a helpful way to avoid paying closing costs when you’ve run out of cash. It doesn’t mean you won’t payany closing fees. Actually, with this option you usually pay much more in the long run. However, instead of paying for closing fees up front, the closing costs will be incorporated into the loan. Your lender will take care of the cash payments, but you’ll need to pay more per month for your mortgage payments.
Do Your Research for Title Agencies
Title and settlement agencies need time to search for historical records and prepare closing documents. Companies like Title Partners of South Florida offer a comprehensive closing service that goes beyond title insurance. We have great relationships with lenders and real estate agents, so we offer great rates and customized services.
Request a free quote from us now. Our prices are competitive, and we offer the best closing services for clients and property buyers who are purchasing property in South Florida.
When you’re comparing prices on quotes offered by title companies, you shouldn’t focus only on the total service cost but also on the quality of service. You should search for reviews of the service on independent and trustworthy websites to make sure the title company you choose is experienced, trustworthy and the right fit for you.
Enjoy the Best Closing Experience in the Industry
At Title Partners of South Florida, we not only show you how to minimize closing costs but also offer closing, settlement, and escrow services that are second to none. Our multiple five-star reviews online show that we walk the walk and deliver the best closing services in South Florida. Give us a call at (954) 566-6000 or contact us online for a free quote now.