Studies show that the closing costs, which can average 2 to 3 percent of a total
home purchase price, are often more costly than many buyers expect. But there
are some ways to save:
* Negotiate with the seller to pay all or part of the closing costs. The lender
must agree to this as well as the seller.
* Get a no-point loan. The trade-off is a higher interest rate on the loan and
many of these loans have prepayment penalties. But buyers who are short on cash
and can qualify for a higher interest rate may find a no-point loan will significantly
cut their closing costs.
* Get a no-fee loan. Usually, though, these fees are wrapped into a higher interest
rate though it will save you on the amount of cash you need upfront.
* Get seller financing. This kind of arrangement usually does not entail traditional
loan fees or charges.
* Rent the property in which you are interested with an option to buy. That
will give you more time to save for the upfront cash needed for the actual purchase.
* Shop around for the best loan deal. Each direct lender and each mortgage brokerage
has their own fee structure. Call around before submitting your final loan application.
