When buying a home, many people think about gathering funds for their down payment and deposit, but how many people think about the other expenses like closing costs. Closing costs are typically about three to six percent of the purchase price and are made up of taxes and sometimes transfer fees as well as other costs. While there are some costs that go to your attorney, title insurance company, and lender, a majority of our costs will go to the city, county, and state. So how can you reduce your closing costs and get into your new home without losing your shirt? Let’s take a look.
Look Loyalty Programs
Some banks may offer a loyalty program for helping their customers with closing costs but only if you use the bank’s financing for the purchase. Banks like Sun Trust, Bank of America, and Chase all have loyalty programs, which will reduce some of the origination fees.
End of the Month Closing
While most people want to close on their new home as soon as possible, there is something to be said for waiting until the end of the month to close. Waiting until the end of the month could cut down on the interest payment you’ll have to pay at closing. For example, if you settle on the 10th of the month, you will have to pay the per diem interest from the 9th to the 30th or 31st of the month. But if you close on the 29th, you will only have to pay interest for a few days.
Get the Seller to Pay
Depending on the loan you have, many lenders allow sellers to contribute up to six percent of the sale price to the buyer for closing cost credit. This contribution is tax-deductible for the seller and is the perfect way to reduce your closing costs.
Wrap Them into the Loan
Let’s face it; you are already spending hundreds of thousands of dollars on a home. So why not add a little more onto it by tacking on your closing costs? Your lender many charge you more for wrapping these costs into your loan, but it will give you more money for your moving expenses.
While it may seem like closing costs are expensive, there are some ways you can lower your costs. For more information buying a home, call Simply Referable.
Reducing Closing Costs with Simply Referable
Together, with your Simply Referable team, you’ll cut the right deal for the right price with qualified guidance every step of the way. Every team member is committed to selling your home and forming a lasting bond with your family. Thanks to our roots in the Maryland/DC region, we can help you find your dream home. Contact us online and give us a call at 410-983-9045. To see some of the stunning homes we work with, follow Simply Referable on Facebook, Twitter, Google+, Pinterest, YouTube, and LinkedIn.