07/13/2023
How To Avoid Closing Costs!
While there’s no way for you to dodge these fees entirely, there are ways that homeowners can pay a lot less.
Some closing costs are negotiable. Check your lender’s good-faith estimate (GFE) for an itemized list of fees. You can also use your GFE to comparison shop with other lenders.
Here’s how to get closing costs waived:
1. Look for a loyalty program. Some banks offer help with their closing costs for buyers if they use the bank to finance their purchase.
2. Close at the end the month. If you close at the beginning of the month, say March 6, you have to pay the per diem interest from the 5th to the 30th. But if you close on the 29th, you pay for only one day of interest.
3. Get the seller to pay. Most loans allow sellers to contribute up to 6% of the sale price to the buyer as a closing-cost credit and a tax-deductible expense for the seller.
4. Wrap the closing costs into the loan. Mortgage lenders charge more for this, but if you don’t have the cash, it’s a way to get into the house with less cash up front. You may consider a no closing cost mortgage. With this type of mortgage loan, the lender covers the fees, but you’ll be paying a higher interest rate.
5. Join the army. Military members have closing-cost benefits. Service members and veterans may qualify for funds to help them purchase a home, that's not limited to the VA loan. Research to make sure you get everything you are entitled to. Visit usmhaf.org for more information.
6. Join a union. AFL-CIO members can get help purchasing or refinancing a home with closing-cost discounts and rebates from the Union Plus Mortgage program.
7. Apply for an FHA loan. Americans with lower incomes can apply for an FHA (Federal Housing Administration) loan, a government-backed mortgage. Buyers can get a bit of help from interested third parties, who can pay up to 6% of the new loan amount. FHA loans are also a bit more relaxed on credit scores.
The Military Housing Assistance Fund offers closing cost assistance for veterans who are buying a new home. Get help covering your costs with this helpful program.
