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3 Ways to Cut or Eliminate Real Estate Closing Costs

Tuesday, March 16, 2010 posted by Tommi Crow

If you know where to look, you can drastically cut or eliminate real estate closing costs.     On average, closing can run from  3-6 percent of the purchase price of your home.   But we know 3 ways to stop the pain…

  • 1.  Ask the Seller to Pay Them.  Most lenders allow the seller to contribute up to 6 percent of the purchase price toward the buyers closing costs.  For buyers who are short on upfront cash, it may make sense to offer the seller more money for the property, but ask that they pay for the closing.  (Bonus:  Mortgage points are tax deductible, even if the Seller pays them.
  • 2.  Shop Loans.  Loan fee’s vary drastically, so plan to shop and negotiate.  Ask 3-4 lenders for their best rate (without points) and an estimate of their fee’s.  Submit a loan application with the lender that is offering the best deal and carefully read the good-faith estimate they provide.
  • 3.  Buy Cheaper Title Insurance.  Title insurance is required by all lenders and protects against disputes or challenges to ownership.   Keep in mind that it is insurance, so as much as 80 percent of the premium will be paid to the agent as a commission.  Shop for cheaper title insurance with companies like EnTitle Direct, which charge less for insurance by eliminating the middleman.

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