Closing Costs & Your New Home

If you’re close to buying a home, closing costs will become a point of consideration for you- maybe even concern. Here in Walnut Creek, CA – and the surrounding areas- closing costs are pretty expensive, but pretty competitive when looking at our neighboring states.  You need to look at paperwork called TLE. The Loan Estimate (TLE) is given to you within three business days of turning in a mortgage application. It outlines the various terms attached to the loan, including your interest rate, estimated monthly payments and the cash you need to close.

On page two of the TLE, there will be an A section and a B section. The B section amounts are non-negotiable. These costs include the appraisal, credit report, flood certification and tax services.  There are fees in section A and even (if you have one) section C.  You can always try to negotiate the lender fees is to ask if any of the fees may be waived, such as the application fee. This is one way to understand and save on the closing costs for your pending home. Sometimes, the lender may  offer you a credit to offset some of your closing costs, but this strategy will usually add additional costs onto your mortgage in the form of a higher interest rate. You also should know that you are free to choose your lender; don’t just settle on one without weighing your options.

You can  avoid upfront fees on your loan by getting a no-closing cost mortgage, in which you don’t pay any of the closing costs when you close on the mortgage.Typically, when a lender offers a deal like this, your loan will cost you more for not coming out of pocket with cash for the closing costs, or the lender may wrap the closing fees into the total mortgage owed, in which case you end up paying interest on the closing costs – never good.

Right now, it is really popular for home buyers to negotiate with the seller over who pays these fees. Sometimes the seller will agree to assume the buyer’s closing fees. Usually, however, it is the buyer who has to pay the closing costs. With the market becoming more and more competitive, and bidding wars starting to happen again, asking for the seller to pay the closing costs- and actually having that happen- is very rare.

Closing costs can be negotiated – to an extent- but they are usually fixed and they usually are paid in cash. Still have questions? Let’s meet up and talk. Shoot me an email, text or call me to plan a time to talk over coffee.