The real estate market will continue to evolve and grow as time progresses. One must become familiar with the latest industry trends and news to be successful. For example, closing costs are one aspect of real estate that one cannot afford to ignore.
Real estate transactions can be very expensive. Closing costs will always play a role in the purchase price of a home. They are mandatory additional expenses that will increase the home’s purchase price. Closing costs are charges, expenses, and fees attached to real estate transactions. One can be prepared to handle closing costs successfully by simply being informed and prepared.
What are Closing Costs?
Closing costs are miscellaneous fees that are charged by loan officers. Closing costs are affected by your area. They are also affected by the mortgage lender, type of mortgage, and the total loan amount.
Let’s take a look at some of the fees that will be included in the closing costs:
-Loan Processing
-Loan Application
-Appraisal
-Attorney’s Service
-Escrow Agent’s Service
Attain a Written Estimate
HUD requires loan officers to provide borrowers with a standard Good Faith Estimate. The Good Faith Estimate clearly discloses closing costs and key loan terms. This new regulation requires lenders to provide full disclosure of all costs in the transactions. This also pertains to closing costs.
The Good Faith Estimate protects consumers from scrupulous lenders who have taken advantage of consumers for many years. Loan officers cannot deviate from a documented amount after the estimate is furnished to the buyer. Buyers can use the Good Faith Estimate to find closing costs that will be suitable for their pocketbook.
Shop Around
Shopping around can help one find a lender who is willing to offer reasonable closing costs. Lenders know that the mortgage industry is very competitive. This is the primary reason why many of them are willing to be flexible with their closing costs. One should make an effort to get closing cost estimates from at least five lenders. This can help secure the best deal.
Negotiate
Negotiating is also critical when it comes to getting an exceptional deal for closing costs. Fees for services not rendered by third parties are negotiable. One should always keep this in mind when it comes to applying for a mortgage loan. You should always be willing to negotiate with the prospective lender when it comes to your closing costs. This can help you save anywhere from $200 to $700 at the closing table.
To better understand what charges are from your lender and broker and which are third-party fees, ask your broker or lender directly when hashing out the details. Your GRE will list the fees in a numerical code that usually ranges from 800s to 1300s. Typically the negotiable fees that your lender can waive lay within the 800s. These fees are usually termed origination, broker, loan discount, underwriting, application, commitment, and tax-related service fees.
Finding an Immaculate Home at an Affordable Price
Locating a nice home that fits your price range can be challenging. This is why one should seriously consider working with an experienced real estate team. A highly professional real estate team can help anyone find their ideal home. For example, The Dhanji Team is one real estate team well-known for helping buyers find their dream home within their price range.
Closing costs should always be taken into consideration when it comes to purchasing a home. The keys listed above are designed to help buyers learn more about these extra expenses that take place at the closing table. They can also be used to reduce closing costs significantly.
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