Buying a house involves emotion. And at last, after viewing several houses for sale in San Antonio, Tx when you finalize the one you want, you feel overwhelmed. But this joy sometimes gets short-lived when you are informed about the closing cost that you need to pay over and above the negotiated deal. So, after all the hard work when you finally seal the deal on the house within your budget, the closing cost pinches you hard.
Closing costs are additional fees (over and above the purchase price of the property) paid to third parties to facilitate the closing of a real estate transaction. Closing costs come up to 3% to 6% of the home purchase price. The lender provides you a closing disclosure form three days before closing your deal. This gives you an idea about the additional cost you need to pay at the time of closing. Also, if you find the closing costs too high or if you find any new fees at the time of closing which is not mentioned on the closing disclosure form, you can clarify it with your real estate agent in San Antonio.
The closing cost includes:
Loan origination fees,
Underwriting of a mortgage loan,
Homeowner’s insurance fees,
Home inspection fees,
Property appraisal fees,
Closing costs are payable by both the buyer and seller, but the buyer usually shoulders the lion’s share as compared to the seller. The buyer is responsible for paying most of the fees related to the mortgage. The seller is responsible for paying the real estate commission including the buyers too. This commission works out to 6% of the purchase price of the property.
So, in short, the closing cost is more like a burden on the buyer which cannot be eliminated. However, there are ways to minimize the cost through negotiation.
Following are a few good tips offered by a real estate agent in San Antonio that will help you to reduce the closing costs as much as possible.
A loan estimate form consists of the different closing costs you need to pay at the time of closing. A lender will give you a loan estimate form after you apply for a loan. Get a loan estimate form from the different lenders and compare the same. Scrutinize each item included in the closing cost. Look out for unnecessary fees and ask the lender to eliminate them. Finally, opt for a lender charging the lowest closing costs.
If you are short on cash consider a no-closing costs mortgage. This will reveal your burden of paying closing costs. Nonetheless, as the closing cost cannot be eliminated they are either bundled up into your loan amount or you are liable to pay a higher rate of interest for the loan duration. Thus, increasing your monthly mortgage payments.
As soon as the deal closes the buyer becomes legally responsible for making the mortgage payment. Consider closing the deal at the end of the month. This will reduce your per diem interest. For example, if you close your deal on the first day of the month you have to pay the per diem interest for the whole month. But if you close the deal on the 29th of the month you pay interest for only one day.
Closing costs include fees payable to various service providers such as home inspection fees, appraisal fees, homeowner’s insurance fees, title insurance attorney fees, etc. Ask top realtors in San Antonio for a list of all such service providers. Negotiate and compare the competitive rates of the different service providers.
Depending on the market and seller’s motivation level, negotiate with the seller to contribute towards closing costs. Many times, the seller contributes 6% of the sale price as a credit for paying the closing cost for finalizing the deal. Moreover, this credit is a tax-deductible expense for the seller. But in today’s hotly-competitive market be ready to accept a flat “NO” from the seller.
Various benefits are given to the different sections of society for paying the closing cost. Military members, service members, veterans, and union people are eligible for financial assistance for purchasing a home including discounts for closing costs.
Moderate-income home buyers are eligible to apply for an FHA loan. FHA loans have a lower rate of interest and lower down payment. Also, closing costs and origination fees are included in the loan. Thus you have the facility of paying the closing cost in your monthly mortgage payment. Some bank offers incentives on the home mortgage to their existing customers.
Paying closing costs over and above your intended budget does get tricky for the buyers. However, the above tips may help you in reducing the closing cost to an extent. Further, a real estate agent in San Antonio will assist you in all possible ways to negotiate the best deal on San Antonio condos for sale that fits your budget.
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