Buying Your Home - Escrow & Closing Costs
How can I save on closing costs?
Studies show that the closing
costs, which can average 1 to 3 percent of a total home purchase price, are
often more costly than many buyers expect. But there are some ways to save:
Negotiate with the seller to pay all or part of the closing costs. The lender
must agree to this as well as the seller.
* Get a no-point loan. The
trade-off is a higher interest rate on the loan and many of these loans have
prepayment penalties. But buyers who are short on cash and can qualify for a
higher interest rate may find a no-point loan will significantly cut their
* Get a no-fee loan. Usually, though, these fees are wrapped
into a higher interest rate though it will save you on the amount of cash you
* Shop around for the
best loan deal. Each direct lender and each mortgage brokerage has their own fee
structure. Call around before submitting your final loan
Who pays the closing costs?
Closing costs are
either paid by the home seller or home buyer. It often depends on local custom
and what the buyer or seller negotiates.
What are closing
Closing costs are the fees for services, taxes or special interest
charges that surround the purchase of a home. They include upfront loan points,
title insurance, escrow or closing day charges, document fees, prepaid interest
and property taxes. Unless, these charges are rolled into the loan, they must be
paid when the home is closed.
Why do I need a title report?
As much as you as a
buyer may want to believe that the home you have found is perfect, a clear title
report ensures there are no liens placed against the prior owners or any
documents that will restrict your use of the property. A preliminary title
report provides you with an opportunity to review any impediment that would
prevent clear title from passing to you.