Steps on How to Negotiate Closing Costs
When you are purchasing a new home there are are costs involved such as down payment and closing costs. A real estate agent will be able to show you how to negotiate closing costs.
How much is a Down Payment?
The down payment needed will be determined by the type of loan you qualify for. Typical closing costs are on a VA Loan zero down payment, FHA loan 3.5% down payment and most conventional loans are as high as 20% down payment. The down payment can’t be negotiated however borrowed money can be used in some instances.
How to negotiate Closing Costs?
Closing costs are the costs associated with the purchase of your home. Closing costs for a buyer include the Escrow Fee, Inspection Fees, Title Service Fees, Government recording fees, Interest, HOA Fees, Notary Fees, Taxes and Lender Fees; credit report- points- home owners insurance- interest- origination fee- doc fee.
Closing costs are usually around 1.5-5% of the sales price. When you write the offer to purchase your home what your final purchase price number is has an impact on your closing costs. One saving grace is closing costs can sometimes be negotiated. When you and your real estate agent write the offer you can request the seller to pay all or part of your closing costs. Depending upon the market and the sellers situation will determine if the seller will pay towards your closing costs.
When you sit down for your buyers consultation your real estate agent will be able to educate you on the current market conditions and trends to see if sellers are paying towards closing costs.
As a buyer it is a good idea to speak with more than one lender to shop around for a lower interest rate and fees. Most buyers are more interested in the interest rate and don’t realize that all lenders charge different upfront fees. The lower the upfront fees the lower your closing costs will be at the time of closing. However the lower the interest rate the lower your monthly mortgage fees will be so that is important also. Your lender will provide you with a good faith estimate at the pre approval appointment that contains the fees the lender will charge. Compare the good faith estimates and choose the lender who offers the best upfront fees and interest rate for your situation.
Negotiate an end of Month Closing in your Offer
In Nevada the lender will send a worksheet to the title company with all the lender fees to be charged to the buyer at closing. One of the fees will be interest. All lenders charge for the current month at closing. What that means is the earlier in the month you close the more interest you will owe. So closing later in the month equates to lower closing costs. An experienced real estate agent should know if you are concerned about your closing costs being low how to negotiate a closing date that will help you keep your costs down.
The Gonzales Team is committed to helping their client’s with their needs and during the Buyer Consultation appointment how to negotiate closing costs to fit your needs will be discussed.
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