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Your down payment is only part of the financial picture when buying a Southern California home. You also need to pay closing costs. Some of these costs are fixed. Others are not. A savvy homebuyer may want to consider some of these money-saving tips to lower what they can.
Money-Saving Tips for Your Closing Costs
Which Costs are Negotiable?
First, it helps to know which costs are fixed and which are negotiable. Appraisal fees, title fees, recording fees, and credit reporting fees all fall under the “non-negotiable” banner. However, your bank might remain open to negotiation on your origination fees, application fees, commissions, and your mortgage lock fee. And with the possibility for negotiation also comes the possibility to save money. But how?
Start Shopping
Fees vary from lender to lender. So, start with talking to several different lenders first. Yes, that may mean filling out more than one application. But the time you spend doing so may save you hundreds and even thousands of dollars in the long run.
Loan Estimates
Once you submit an application, the lender must legally supply you with an official loan estimate. These documents provide the estimated costs for every part of your loan, including your mortgage payment, interest rate, taxes, insurance, and closing costs. Compare all of the estimates you receive to see which ones offer the best terms and lowest fees before you decide which one to use.
Make sure to pay special attention to page two of your loan estimate. Why? There is a section called “Services You Can Shop For”. Use this checklist to do your shopping.
Ask the Seller to Pay
Depending on the state of the market at the time you buy your Southern California home, you might want to ask the seller to pay all or some of your closing costs. A motivated seller may do whatever it takes to get the deal done. That may very well extend to helping you with your closing costs.
Choose a Late-Month Closing Date
Finally, while not an actual negotiable “fee” per se, the date of the month you close can save you money as well. Some things like HOA fees, taxes, and prepaid interest get prorated. So, the later in the month you close, the lower these costs at closing. If you close on the 1st, you must pay an entire month of these fees. However, if you close on the 25th, you only pay for five or six days. That may save you a significant chunk of change.
Muna Dionne, your Inland Empire specialist with Coldwell Banker Realty
