Closing Costs

How can I save on closing costs?

Studies show that the closing costs, which can average 2 to 3 percent of a total home purchase price,
are often more costly than many buyers expect. But there are some ways to save:
* Negotiate with the seller to pay all or part of the closing costs. The lender must agree to this as well as the seller.


* Get a no-point loan. The trade-off is a higher interest rate on the loan and many of these loans have prepayment penalties.
But buyers who are short on cash and can qualify for a higher interest rate may find a no-point loan will
significantly cut their closing costs.


* Get a no-fee loan. Usually, though, these fees are wrapped into a higher interest rate though it will save you on the
amount of cash you need upfront. * Get seller financing. This kind of arrangement usually does not entail traditiona l
loan fees or charges.


* Rent the property in which you are interested with an option to buy. That will give you more time to save for
the upfront cash needed for the actual purchase.


* Shop around for the best loan deal. Each direct lender and each mortgage brokerage has their own fee structure.
Call around before submitting your final loan application.



Where do I get information about closing costs?

For more on closing costs, ask for the "Consumers Guide to Mortgage Settlement Costs,"
Federal Reserve Bank of San Francisco,
Public Information Department, P.O. Box 7702, San Francisco, CA 94120 or call (415) 974-2163.



What are closing costs?

Closing costs are the fees for services, taxes or special interest charges that surround the purchase of a home.
They include upfront loan points, title insurance, escrow or closing day charges, document fees,
prepaid interest and property taxes. Unless, these charges are rolled into the loan, they must be paid when the home is closed.



Who pays the closing costs?

Closing costs are either paid by the home seller or home buyer. It often depends on local custom
and what the buyer or seller negotiates.