More Ways To Beat Closing Costs On Your Home Mortgage

Closing costs on your home mortgage are normally the thing that buyers don't worry about until the last minute. Problem is, if you don't think about closing costs until the last minute, you will likely be shocked when you find out that these costs run into the thousands of dollars. Relax though and don't be intimidated. I have made the mistake of not planning, and I can show you how a little planning, can save you hundreds and potentially thousands at closing.

If you can read a HUD1, then you should know exactly what you will be charged at closing. However, simply being able to read and understand a HUD1 doesn't mean that you'll save money. What you need to do prior to closing and during the entire time leading up to closing is be in the habit of every time you hire someone to complete work for you that's required for the close, ask how much they charge. Don't just accept the realtors recommendation for a home inspector. Ask around if possible. If you don't know the realtor that well, how do you know that their recommendations are best for you. Although they usually will be "steering you in the right direction. It behoves you to check around. Don't just shop for price, shop for service as well. If you are working with a home mortgage broker, you should understand that how much they charge usually varies by the amount of the loan. When your broker offers you several home mortgage loans to choose from, ask about their fees with each option. It's critical that you include the cost of fees when you are comparing home mortgage loans. This is the only way you can get an apples to apples comparison. Don't forget, there's more to a home mortgage than simply the interest rate. It's very possible that the lower home mortgage interest rate, might also include a "hefty" fee. Home mortgages are a one-time deal, but higher up front fees could also be your new carpet or furniture payments.

Beware of courier fees. I've been hit with these before. You've negotiated what you think is the best rate online through someone you got hooked up with through Lending Tree or some other Online Loan finding service. However, you're likely dealing with someone that's 1,000 or more miles from you. If this is the case, then there's likely no way around a courier fee. Since everyone wants to get the closing completed and start that wonderful experience called moving, the closing documents typically arrive at the Title Company one day after completion. Unless you know that someone had to drive over an hour just for your file, you should refuse to pay courier fees. It's reasonable to pay a next day air fee, which is usually about 10 to 15 dollars, but not a courier fee. It is very important that you make your home mortgage broker and lender justify their fees. Sometimes when they start to explain a fee, you might come to the agreement that it is unnecessary and can be removed from the HUD.

Another, most common way to save on Closing Costs is to comparison shop home mortgage brokers, too. Be careful when you do this. You want a home mortgage broker that will work to put you into your house. I recommend that you work a few local brokers against each other to get the best deal. Be up front with them and tell them that you want the best deal not only for the close, but for the life of the loan. Ensure that the mortgage broker or bank understands that you know what you're doing and that you understand the various fees and interest rates available. If your credit is good, you will save yourself the most money by going directly to a home mortgage lender (the bank or institution that will actually provide the funds at closing). A lot of times you may find that a home mortgage broker is your best option only if you are having trouble getting a home mortgage. Brokers, specialize in the hard cases. I used a broker for my first home loan. We had a bunch of credit card debt from graduate school and he had to creatively get us approved. It likely resulted in a higher interest rate, but I got into my first home and have never looked back. If you have good credit and have been in your job a while, I wouldn't bother with a home mortgage broker. But let this be our secret, please! The broker is actually working through the bank, so for them to make money, they have to charge more money than the bank. It's like buying directly from the distributor vs. a manufacturer.

More Fees, shop around for deals while you're in escrow or waiting to close Another place fees can vary greatly is your survey. You will probably have to have one, so call around and find a cheap surveyor. Since they are state licensed, any licensed surveyor will do an adequate job. You already know to shop around for homeowner's insurance. The closing process can take weeks or even months, so it really makes sense to use the time to your advantage to get great deals. You won't be able to do anything about reserves or prepaids, so do not worry about them. Usually the lender will determine the prepaids necessary based on your interest rate and timing for real estate taxes. Title companies are like surveyors. Most will do a competent job, so call around for the cheapest. If an attorney is required for closing, I have found that rural or smaller law firms are almost always cheaper than urban or even suburban ones. Better yet, if you have a friend that's an attorney, ask if he or she will help you. If they can't perhaps they can make a recommendation. You can call surrounding counties for attorney fees for a home mortgage closing. By driving a bit you could save major money.

Points and other gimmicks to lower your interest rate or buy-down your interest rate are actually home mortgage lender fees. Do not pay them unless you have to. If they will give you a lower rate with points, get it in writing, then go to someone else and get that rate without points. If you have a hard time getting a home mortgage loan, you may have to pay them. Points are a percentage of the loan, so they are very expensive. If it looks like you might have to pay them, offer to pay the same amount as a down payment, reducing the loan amount. The lower amount may get you a loan without points, and instead of fees, you have equity. Question everything, accept what you have to, and in the end be content. No home mortgage is perfect.

Closing costs on your HUD just compile many fees related to your home mortgage. Thanks to the Feds, they are all in one place on this form. Knowing what they are and what caused them can give you the confidence to have a smooth closing. You can now walk into closing knowing exactly what you bought and how much you paid for it, and then head out to with your new home and reason to celebrate.