When buying a Lake Havasu home, most buyers put saving for a down payment near the top of their list. Sometimes, a buyer’s credit score or wondering about how much they can afford enter the top echelon of concerns. Unfortunately, other expenses come into play when purchasing a home. They include closing costs. These costs tend to run around 2% of the purchase price in Arizona. That could add another $5000 that the buyer needs to come up with in addition to their down payment. Fortunately, there are a few ways you can save money on these costs.
Saving Money on Your Havasu Closing Costs
Talk to Several Lenders
It might be tempting to go with the first lender you talk to. But to receive the best deal, you need to shop around. Some lenders offer programs that others don’t. Pay attention to lender fees as well as interest rates. Just because a lender offers a lower rate than others doesn’t necessarily mean it’s a better deal. The fees they charge could be astronomical to compensate for the lower rates. Therefore, read everything carefully.
Check Your Loan Estimate
The law requires lenders to provide buyers a loan estimate within three days of applying for a loan. This itemized list includes the lender fees as well as the estimated interest rate and other items. Check to make sure the fees listed are what the lender quoted you when you initially talked to them. Then, check your closing statement before signing your final documents to make sure these fees have not changed. If they have, talk to your lender to find out why.
Some services involved with purchasing a Havasu home are negotiable. You’ll find these under the “Services You Can Shop For” section of your loan estimate. They include title insurance, pest inspections, title search costs, and a title insurance binder. Some lending fees might be negotiable as well. They include application fees, recording fees, underwriter fees, and lawyer fees. Your lender might not be willing to budge on any of these fees. But it never hurts to ask.
Late Month Closing
Why would it matter whether you close on the 1st or the 31st of the month? Some of your fees will be prorated. That could cost you several hundred dollars more depending on what day you close. For example, prepaid interest. Let’s say you close on the 3rd of March. The interest rate on your $250,000 loan is 3.75%. You must prepay 28 days worth of interest. That translates to $719 of prepaid interest you owe at closing. However, if you close on the 30th of March, you only pay for two days ($51). So, a later closing date in the month means less money you must come up with out-of-pocket when signing your final paperwork.
Ask the Seller to Pay
Finally, you could always ask the seller to pay all or part of your closing costs. Depending on how motivated they are to sell the home, they may offer to pay at least some of the closing costs to help seal the deal. Another possibility is to see if the lender can roll the closing costs into the mortgage loan. That will increase your monthly payment but will also require less out-of-pocket at closing.
When you’re ready to start looking for a new Lake Havasu home, contact me.