Purchasing a property requires a lot of money than you expect. It’s not only the price offered by the homeowner, it also comes with closing cost. Closing cost is all the fee required to transfer the property ownership from one person to another. Without understanding the expenses needed for the closing cost, you may end up spending more than you expected to. Below are several tips to suppress closing cost, as noted from Investor Junkie!
Grants and Loans
First and foremost, check on whether you are eligible for federal, state and/or local government grants before you go house shopping. There are unexpectedly a lot of local and state programs available.
For example, Maryland offers mortgages and down payment assistance to first-time homebuyers. Homeowners can also ask for loans and grants for home repair and energy efficiency improvement. In Baltimore, eligible purchasers may receive a deferred loan up to $10,000. The loan is forgivable if the homeowner has resided in the property as a principal residence for 15 years.
So, check what you might be eligible for, and apply for them sooner if necessary. Note that some programs may need applicants to participate in classes and complete paperwork prior to putting a purchase offer contract on the property.
Collaborate with the seller
It’s not impossible. Some sellers might actually be happy to help you with the closing cost just to get the deal done faster. However, this strategy might only work for specific sellers. Take for example an area that has a lot of homes on sale and sellers could receive an incentive for selling the homes in the middle of market competition. The result might be different in a hot market with scarce inventory, and sellers are getting multiple purchase offers.
Take your time to compare one and another shop
Your closing cost also depends on the lender. Thus, always try to ask for the estimated closing cost from your lenders. If you are lucky, you may meet mortgage lenders that will be willingly offering help with closing cost.
Note that you may also as your lender to match the closing cost to the lower ones in case you already made a deal with a lender who costs you higher than you found. That’s why it is important to go for some window shopping, just to know the range of closing cost offered.
One more important thing to note is to understand what they charge you for. Check the services offered. If you think some of them are unnecessary, ask if you could skip them. That way, you could save more money for a better cause.
Read also: Property Selling: A How-to Guide (Part 1)
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