Creative Ways to Manage Closing Costs

Creative Ways to Manage Closing Costs

The absolute best way to manage closing costs is to plan ahead. Having a good knowledge of what your closing costs are going to be is your first step to managing these costs in a straightforward and stress-free manner. While it can be easy to get wrapped up in all the other financing concerns with buying a house, keeping closing costs in mind throughout the process is key.

There are several techniques that you can use to come up with some or all of your closing fees.

If at all possible, build your closing fees into the other financing that you do. Closing fees are generally between 1.5% – 2% of the total cost of your home. If you are taking out a loan to make the down payment, take out more to cover closing fees. If you are able to make a significant down payment on your home, you can use a little bit of the extra equity when you finance your home to set aside for the down payment as well.

Don’t be afraid to shop around when it comes to lenders and financing options. Most banks and other lenders will provide an estimate for closing fees and other costs. Don’t be afraid to ask for several estimates and compare them, so you can choose an option with the most reasonable closing costs.

Also, never be afraid to negotiate with your home’s seller. During the negotiation process, you may be able to convince the seller to credit you some of the money that will ultimately go to your closing costs. This is not something that you can count on, but if you can get it, it can be a great help.

Finally, pay attention. Keep an eye out for inflated fees or “junk fees” that might be tacked on to your closing costs by third parties. Also do everything that you can to cut down on costs that you don’t have to rely on a third party for, like courier fees and other administrative fees. Keep a sharp eye on your finances and make sure you’re not paying more than you need to.

Using these tips will keep your closing costs to a minimum and will help you enjoy the excitement of your closing day!