Ready to dive in and buy that house you've been looking at? Be sure to have a clear understanding of the costs for purchasing, before you make an offer!
Traditionally, closings costs are the cost associated with the purchase of your new home. This includes application or credit check (depends on the lender), real estate appraiser, home inspector, real estate attorney, cost of the loan, and any other miscellaneous costs that may come up when it is time to buy your home. As you can imagine, closing costs can become very expensive. Even if you have the pleasure of obtaining a loan with no money down, be sure to find out how much closing cost will be.
Here are a few ways to save on closing costs:
1. Some lenders allow you to finance your closing costs. This would mean that instead of having your loan at 100%, you would have to finance 103%, 106%, etc. depending on the total cost.
2. Ask the Seller to pay closing cost for you. The Seller will not have to pay anything up front, or come up with cash-but will instead have the closing costs deducted from the money they make on the sale.
3. Research first-time homebuyer programs, to find out if you qualify for closing cost assistance. Several non-profits, and even some government agencies help buyers by paying closing costs, if you meet certain qualifications.
Remember, your home inspection, and perhaps the appraisal will happen before the closing, so you may have to come up with $300+ for those fees, as well as your earnest money ($500-1,000). So be prepared!
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