You hear a lot about the down payment required to buy a home, but closing costs are also a significant consideration. You can’t eliminate all or even most of these costs, but there are steps you can take to reduce them.
You can do this by understanding how much closing costs amount to early in the purchase process.
Several factors go into determining your closing costs. These vary depending on the state in which the property is located, local market traditions and from lender to lender.
You can’t do much about the state requirements or local traditions, but you have choices based on the lender you choose: you can shop for your lender and negotiate some closing costs.
Ask About Costs When Prequalifying
When people first talk to a lender about prequalifying for a loan — not pre-approval — they tend to focus on what the lender wants rather than what they want as a borrower.
The lender wants to know about credit history, a down payment, job history and the like. As the borrower, you want to ask about closing costs that include interest rates, points and fees.
Source: Brian Kline | Benzinga.com via MSN Money
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