Meet The Closing CostsBy Debbie Wilson
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You may be ready to take ownership of your new home, but are you ready to fund the closing costs associated with your mortgage? Being prepared means more than just having the money in the bank. It involves your ability to understand, negotiate, and finance closing cost fees and charges.
Understanding Closing CostsThe cost of your new home loan is much more than simply interest rates and points. Rather, it is a mortgage comprised of origination, application, processing, underwriting, credit report, title insurance, recording, inspection, and tax fees. In most cases, you will be given a "Good Faith Estimate" explaining what the entire new home loan will cost. You'll also receive a Truth-in-Lending disclosure and a HUD-1 Settlement Statement. The Truth-in-Lending includes items like your APR and other financial terms. The HUD-1 is issued right before closing with an itemized list of closing costs to be paid. Because this basically establishes the funds you must bring to closing, it is critical that you understand and agree upon them completely.
Negotiate Your Closing CostsNot all closing costs are set in stone. Some costs may be required by your state, but others are highly negotiable and worthy of your attention. It is usually best if your real estate agent or mortgage broker helps you negotiate these items in the sales contract. They usually have a better idea of what and how much negotiation room is available and can get you the best deal on the almighty dollar.
So go ahead and get ready to receive the keys to your new home. Just be prepared to know what your closing costs will be, what they mean, and what you can do to negotiate or reduce them before your new home loan is funded and ultimately closed.
About the Author
Debbie Wilson owns and operates a lakeside resort. Her previous experience includes profitability consulting for a national healthcare company. Debbie holds a B.A. in Business Management with a minor in Physical Education.
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