Closings costs. They’re the final hurdle before making the home yours and moving in. Let’s talk about ways to reduce them (or avoid them).
Closing costs can weigh in as much as 5% of your home’s purchase price, so they’re certainly something to take seriously. When you’re in the process of buying a house for sale in Redding, your lender will provide an official closing cost estimate.
This will give you a good idea of what to expect, but there’s a few tips and tricks to trimming down this number.
Throughout most of the homebuying process, there are opportunities to negotiate. If you aren’t in love with the price of your closing costs, shop around. You can get multiple quotes for closing costs and even get quotes for each individual service listed on the quote. Some of these items include inspection fees, survey fees, settlement fees, appraisal fees, etc.
Don’t just glance these over, but take time to go over each line item with your lender. You’ll feel more comfortable when you understand each of these charges and why they cost as much as they do.
You’ll also notice that a good lending agency will be confident in their quote, and isn’t hiding any unnecessary fees.
Bargain with the Seller
Use your buying power wisely. Some sellers will be willing to work with you to lower the cost of their home to compensate for the closing costs. If the seller is motivated to finish the deal, they’ll be more likely to comply.
This could be tricky when buying a house for sale in Redding, because high demand makes it harder to negotiate. But keep in mind that as the buyer, the cards are in your hand.
The nearer you are to the last day of the month, the less your interest charges will be for that month.
If you close on the 15th of May, you’ll owe interest from that day until the end of the month. But if you can want until the 30th, you’ll only have to pay interest for two days. Check out this example:
- Mortgage amount: $250,000
- Interest rate: 5%
- Daily interest accrued: (250,000 x .05) / 365 = $34.25 per day
- Closing on May 15th: (15 x 34.25) = $513.75
- Closing on May 30th: (2 x 34.25) = $68.50
Schedule your closing day accordingly, and you’ll have an easy way to save a few bucks.
Here’s a few more tips on best time to buy, sell, and list your home.
Are You Refinancing?
If you’re considering refinancing your home, yes, you will have to pay closing costs again. But can you can get away with a much smaller amount.
When refinancing there’s a chance you’ll be able to waive appraisal fees. You can also save on title insurance, and even get a cheaper rate on your insurance. Talk to your lender about how you can take advantage of these things.
Refinancing has it’s perks. Here’s a quick refinancing guide to learn more.
No Closing Costs
A mortgage without closing costs? Yes, it’s possible. Instead of paying closing costs up front, you can cover the amount by increasing the amount of your mortgage, or paying a higher interest rate. This is a good option if you have a high-interest rates on other debts.
You’re just one step away from moving into that house for sale in Redding, CA. Take care of your closing costs wisely and look forward to the days to come.