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. This is the best option of all. As long as the house appraises for the increase, it’s a win, win.
* 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. Typically the rate is not much higher, but buyers need to be aware that this is for the life of the loan. The interest fees can add up over the term.
* Don't try to get seller financing. This kind of arrangement usually does not entail traditional loan fees or charges, but will typically scare away a seller..
* While you can possibly rent the property in which you are interested with an option to buy, this typically will also frighten a seller as such a request is usually due to credit issues. It's better not to suggest this just to get more time.
* 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. Too much shopping can hurt more than help, so don't approach more than 3 vendors. Rates can fluctuate based on credit scores.
A Kentucky native and graduate of the University of Kentucky, Cindy's experience and familiarity with Louisville have been the foundation for a successful real estate career. She holds the real estate certifications of ABR, SRES, CRS and GRI