Closing costs are an integral part of the home buying process. It is not unheard of that some home buyers have no idea exactly how much they are going to pay until the process is initiated. Before taking up a home loan, you should find out about the exact breakdown of closing costs, which may change depending upon the type of mortgage you have. Other factors such as lender fees, property taxes and insurance can also have an impact on the final costs. Do you know that certain closing costs can be negotiated? Let’s find out more about the closing cost negotiation so that you may buy the house for even lesser than you have expected:
Mortgage Insurance
You may also have to pay the annual costs for mortgage insurance, which can vary from one lender to the other. Some of them may charge you on the higher side in the total mortgage loan. Check out with your creditor to know the exact figure you need to pay upfront.
Landlord’s Insurance
The options for negotiation can be limited in this case, based on the area that you live in. But you can always reduce the costs on such an insurance. This is important, since you won’t be able to close on a mortgage without it. Look around for several brokers to get the best deal in the market that suits your budget as well as your requirement.
Title Insurance
This is another essential cost you need to cover. Although there is no compulsion, but in case there’s a problem, it can help you save a lot of money. This insurance is designed to resolve issues regarding the property’s title against fraud or previous disputes.
Attorney Fees
This is generally charged upon you, if the lender seeks assistance of a third-party attorney involved in the process. In a majority of cases, this fees can be easily negotiated or the lender may also choose not to involve them in the final costs.
Costs On Newly Constructed Property
If you are looking to construct a new home rather buying an old one, you may be entitled for valuable credits that can cut down final closing costs. To get the best value, check with a local brokerage and ask for a comparison between the different options. An experienced realtor will be able to answer your questions here effectively.
Property Tax
Property Taxes associated with purchase of home may also have to be covered by putting a certain amount of funds into an escrow account. The creditor will then pay on your behalf, and the advance deposit ensures that there is sufficient money to cover the bills.
Closing cost negotiation should always be done prior to signing the sales agreement. Based on the regulations of the local government, you may also be required to pay additional fees. Always look for better deals to lower down the cost, and do not back away from negotiations in any case. When the day arrives, make sure you have the payment ready. Always remember final closing costs can vary a lot from the estimated amount, so you need to be prepared for that.
