We don’t need to tell you that mortgages are a big deal. Your hard-earned money is at stake, and you have a right to understand where it’s going. Did you know you also have a right to negotiate certain closing costs?
Many borrowers don’t realize this, and those that do are intimidated by the thought of telling a seller or a lender that they want to pay less. At MortgageDepot, we think buyers might feel more confident if they understood which closing costs they might successfully bring down or eliminate through negotiating.
If you are looking for a way to save money during the mortgage process, get comfortable! Today we’re going to discuss a few of the most common ways to negotiate closing costs.
Closing Costs: What’s Included?
Closing costs vary widely by lender and loan type. They are divided into two categories: recurring and nonrecurring. Recurring closing costs are paid at closing and on a regular schedule afterward. Some examples are homeowner’s insurance, property taxes, and HOA fees. Nonrecurring closing costs are paid only at closing and include lender fees, home inspection charges, and title fees.
Negotiating With the Seller
Some buyers successfully reduce their closing costs by approaching the seller. Here are a couple of things you can ask the seller to provide:
- If the home inspection reveals costly problems, you can ask the seller for money to cover those while you free up funds for closing costs.
- You can ask the seller to contribute money to closing costs in exchange for a higher purchase price.
- If the seller is extremely motivated, you might be able to ask them to cover part of the closing costs for nothing in return.
Negotiating With the Lender
Another money-saving strategy is asking for a lender credit to put toward closing costs. If you go this route, you will probably need to pay a slightly higher interest rate on your loan. If closing costs would leave you seriously strapped, a lender credit might be a viable option.
Contact MortgageDepot Today!
If negotiating closing costs with a seller or lender sounds complicated, don’t despair! MortgageDepot’s experienced loan officers will help you determine if negotiations make sense. They will also help you shop for a mortgage program that meets your unique needs. Contact MortgageDepot today to learn more!
Connect with one of our loan consultants to learn more.
