February 26, 2019 | Barb Huntley
You’re on the last stretch to the finish line, and you have one hurdle left to jump; for homebuyers, this hurdle is closing costs. These are usually a surprising chunk of change, but it needs to be paid to get you in your new home. Closing costs are generally somewhere between 3% and 6% of the mortgage, that’s around $9,900-$18,000 on a $300,000 home. But, before you write a check, you should know that there are ways to reduce your closing costs and save yourself some money.
 
First, estimate your closing costs, so they don’t come as a surprise to you on payday. You can plug in all your numbers into an online closing costs calculator or ask your real estate agent or lender to help you with an estimate. Three days before you close on a home, the lender is required by law to send you and the buyer a closing disclosure that outlines all the costs. Do NOT just skim through this document. Look it over carefully to make sure the numbers are what you had previously agreed upon.  
 
Second, look at the negotiable closing costs. These include attorney fees, commission rates, and recording costs. Look at these costs BEFORE you start the buying process. You can then shop around for more affordable attorneys and agents. A lender will provide you a Good-Faith estimate, which is an itemized list of fees. You can use this to compare the costs to other lenders before you decide on your final one.
 
Thirdly, when it comes time to close, try to plan it accordingly, so you close at the end of the month. Interest is paid per diem; therefore if you close on the 1st you will be paying per diem interest from the 2nd to the 30th. If you close on the 29th you only spend one day of per diem interest.
 
Lastly, find a loyalty program. Some banks offer to help with the closing cost if you use them to finance your home purchase. It is the bank's way of providing a reward for being a customer. Many banks do this so look and compare your options!
 
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