Ways for Orlando Home Buyers to Lower Their Closing Costs

For first time buyers, learning how much their closing costs could amount to can be quite overwhelming, but there are a few ways that you can reduce these costs:

1. Shop Around for Title and Closing Services

A title company plays two important roles in your real estate closing transaction. First, it provides you with title insurance to protect you against claims that can be made against the title of the property. And second, it manages and conducts the closing process. As a buyer, you have the right to choose a title company. This is an important decision to make and it is best that you shop around before you you’re your pick. You can ask your real estate agent or lender for suggestions, but it is also good to ask family and friends for referrals. Choosing the right title company will not only ensure a smooth settlement day, it can also save you a lot of money. According to a survey conducted by Federal Title & Escrow Company, home buyers can save as much as $1,180 by shopping around for title services.

2. Ask the Seller to Shoulder Some of the Closing Costs

In Florida, while there are certain closing costs that are customarily paid by the seller, keep in mind that some of the buyer’s expenses are negotiable. You may be able to convince the seller to shoulder other closing costs that are usually the responsibility of the buyer, especially if the seller has been on the market for quite some time and you are the only person who is interested in purchasing their property.

3. Opt for a “No Closing Cost” Mortgage

Those closing costs usually amount to thousands of dollars. If you don’t have the cash to pay for the closing costs upfront, the best option for you is to add these to the loan amount when you refinance your mortgage. While lenders offer “no closing cost” mortgages, be ready for a higher interest rate over the life of the loan. This is also ideal if you don’t plan on staying in your home for more than five years because the slightly higher mortgage rate is going to be less expensive over the course of five years compared to the amount that you would pay upfront in closing costs. Another good reason for opting for a “no closing cost” mortgage is when you need the cash to make renovations on your new home.

4. Sign Your Loan Papers at the End of the Month

The best time to close the deal is at the end of the month, because this reduces your cash outlay for prepaid or “per diem” interest for the period between your loan closing and the beginning of the next month. If you want to calculate your savings, multiply your loan amount by your interest rate then divide the result by 365 to get your daily interest charge. Multiply that figure by the days left in the month to see how much you will be saving.

If you need an accurate estimate of the closing costs you may incur in buying a property in Orlando, Florida, I will be very happy to help. Please contact me at 281-701-5117 or send me a message using the form below: