Real Estate
If the seller will not cover the closing costs, inform the bank and discuss lowering the closing rate. The bank will likely work with you, so do not be afraid to ask.
December 22, 2009 by Graham McKenzie · Leave a Comment
Buying a home is making a major investment, and it’s an investment that can cost a buyer a lot of money unless they do their homework. You can save money on your home loan costs by taking a few steps, regardless of how the economy is doing when you decide to shop for a home loan.
When you apply for a home loan, make sure you have a high credit score. This is common sense in the world of home loans. Poor credit equals either a rejection of the loan or a very high interest rate.
Check your credit report before you apply, and make sure you pull reports from all credit bureaus because your home loan provider uses all credit reports in determining the buyer’s creditworthiness and ability to repay the home loan. If your reports have mistakes, get the mistakes corrected.
The two most important factors that calculate your credit score is your current credit card balance and if the payments are made on time.
Always shop around and collect more than one home loan quote. Lending is a competitive business, so consequentially lenders compete for your money. They are always willing to lower their quote if a competitor is bidding for your service. Use this benefit to your advantage.
Another way you can save money on your loan is by requesting the seller cover the closing costs. Closing costs range between 3-7% of the total cost of the property. You cannot hurt your standing by doing this. The worst thing that can happen is a polite ‘no’ by the seller.
If the seller will not cover the closing costs, inform the bank and discuss lowering the closing rate. The bank will likely work with you, so do not be afraid to ask.
Purchasing a new home is an overwhelming experience, and unless you have millions of dollars to spend, you are going to need a home loan. Trust the lender as a friend and allow them to work with you. But always do your homework and make sure you are getting the best deal possible.
Tom Martens is the content coordinator for South Arica?s leading Homeloans portal which amongst others offers Bond origination services for all major banks.
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