Tips for Saving Money on Closing Costs

Creative Commons License photo credit: Allen Elliotte

Many people are so excited at the thought of purchasing a home that they forget about the closing costs. The closing costs can consist of several fees charged to the seller, including attorney fees, survey fee, title insurance, recording fee, appraisal fee, and processing fees. Most homebuyers are shocked by how much they are charged at closing. Thankfully, there are some ways you can come away with more money in your pocket. The following are some tips for saving money on closing costs:

The first step to save money is to choose the right lender. You may want to work with your local bank, but if they are going to charge you $1,000 more than another lender, is it really worth it? Shopping around for a lender with lower processing fees can save you a ton of money in the end.

You may be required to have title insurance on the home you purchase, but it does not mean you have to use the particular insurance company recommended by your lender. Before you make a decision, take the time to research a variety of insurance companies to make certain you are getting the best deal.

You will also want to negotiate with the title company. Generally, it is the title company that records the documents with the county courthouse. The courthouse may only charge a mere $25 to record it, but the title company charges you $125 or more. Negotiate with the title company or research to find the title company who will charge the least.

Of course, you will also want to negotiate with the seller on the closing costs. This particular negotiation will take place when you are making the offer on the home. In fact, if your real estate agent does not recommend asking for the seller to help pay the closing costs, they are not representing you as well as they should. Most real estate agents will recommend the seller share at least a few thousand dollars of the costs.