How Placerville Homebuyers Can Lower Their Closing Costs

The list containing all the fees and charges related to closing can be confusing and overwhelming, especially to first time homebuyers. However, it is important to keep in mind that closing costs are not set in stone and a lot of these are negotiable. So, if you are a homebuyer in Placerville, CA looking for ways to lower your closing costs, here are some helpful tips:

1. Find Out Which Services Can Be Shopped

While it is common practice for homebuyers to shop around for mortgage rates, this is not the only fee that you can shop for. Did you know that you can also shop around for title insurance and pest inspection fees? Yes, that’s right. Go through the details on your Loan Estimate to find out which services you can shop for and which ones you can’t so you can reduce your overall closing costs.

2. Learn Which Fees are Fixed and Which Ones Can Change

Remember that not all of the fees listed on your Loan Estimate are fixed, some of these can change. If you decide to use a company that your lender has recommended, for example, certain fees, such as your title services, lender’s title insurance, and owner’s title insurance cannot go up by more than 10% at settlement. On the other hand, if you choose to use other service providers not listed in the Loan Estimate, the costs could increase by even higher percentages.

3. Ask Your Lender About Discount Points

Although homebuyers are usually advised to pay discount points in order to get a lower interest rate, some experts would not recommend this when mortgage rates are already low. However, there are some who would still recommend that buyers pay points even when mortgage rates are low, especially to those who plan on keeping the property for the long haul. So, if you would like to know whether or not buying points would be advantageous for you, ask your lender.

4. Be on the Lookout for Overly High or Low Estimates

Despite the fact that closing costs vary in each state and municipality, most third-party fees are fairly comparable. So, if you notice third-party charges that are too high or too low compared to the average, you would need to ask the lender about these before you decide to use them as your lender or title insurance provider.

5. Set Your Closing Date at or Near the End of the Month

You can save on prepaid interest when you schedule your settlement date towards the end of the month, as this particular expense accrues from the closing date to the end of the month. So, in effect, the closer your closing date is towards the end of the month, the lower your prepaid rate is, given that there are fewer days in between these two dates. For example, if you have set the closing date on the 15th of the month, you will have to pay for 15 days of interest; whereas scheduling the closing date on the 30th would only cost you a day’s interest.

If you are in the market to buy a home in the lovely location of Placerville, CA, my team and I will be very happy to show you all your best options in this area. Feel free to give me a call at 530-647-0865 or send me an email at [email protected] to schedule an appointment.