How Can a First Time Brentwood, TN Homebuyer Reduce Their Closing Costs?

Even if you are a first time homebuyer, you can still get a great deal on your Brentwood home purchase. We understand that the list of closing costs could be a bit daunting, but remember that all these are negotiable with your lender and the seller. Here are a few things you can do to significantly lower your closing costs:

1. Get a Rebate

In addition to negotiating for a lower broker’s fee, you can work with a broker that gives you a rebate on its commission to significantly reduce your closing costs. You may choose to do some of the legwork, such as viewing properties without a broker, and in return, you will be given a percentage of the commission paid to the broker at settlement.

2. Do Your Research

As most of the closing costs are not set in stone, it pays to learn about the various fees and charges involved at settlement so you can structure the deal to your advantage, avoiding unnecessary fees and

consequently reducing your overall closing costs. For example, knowing that the mansion tax is only applicable for home purchases valued over $1 million becomes handy if you were about to purchase a property worth more than $1 million. If you want to avoid this cost, you can negotiate with the seller to bring down the sale price for less than this amount so you will not be required to pay for this additional fee.

3. Shop Around

Mortgage bankers can get quite competitive just to get your business; so, take advantage of this and request for a quote from more than one lender. The rates offered by lenders vary, and shopping around and comparing rates can translate to huge savings, ranging from one-eighth percent to a half-percent. A half-percent interest on a $500,000 home loan is equivalent to an annual savings of $2,500. Based on a recent study, a homebuyer can save as much as $1,500 by getting one more quote and at least $3,000 by getting five more quotes from different lenders.

4. Delay Your Closing

Another way you can reduce your closing costs is by delaying your closing date to the end of the month. This is because certain closing costs, such as prepaid daily insurance charges, are computed based on the number of days between the settlement and the start of the succeeding month. By scheduling your closing date towards month end, you are able to significantly reduce your cash outlay for prepaid or “per diem” interest. If you want to calculate your savings, simply multiply your loan amount by your interest rate and divide the result by 365 to get your daily interest charge, then multiply this by the number of days left in the month.

Purchasing a real estate property in Brentwood, Tennessee should not be a stressful and complex process. If you are planning to purchase a home in this wonderful location, I can show you all the best options available for you and ensure a smooth process from start all the way to closing. Feel free to give me a call at (615) 371-1544 or send me an email at [email protected].