Spring is usually the busiest time of the year for home buying. After a long and cold winter, many people are ready to enjoy the nicer weather and begin to shop for a new home. Spring is also perfect time for home buying for families with children because it allows them to move during the summer without interrupting school.
Home buying has costs associated with it other than the mortgage itself. Known as closing costs, these fees are a part of the home buying process and they are due at the time that the mortgage is finalized. Buyers, however, can negotiate these costs and reduce the expense with a little bit of effort and with the help of a good mortgage professional.
Shopping Different Lenders
Every lender will have a set amount for the fees on processing a mortgage. These fees will vary with each lender. These fees will be listed on the Good Faith Estimate that the lender provides with their loan offer. Comparing these fees line-for-line may not be possible. Every lender has their own terminology for the same type of fees. You should look at the overall costs associated with processing the loan and base your comparisons off of the totals.
Third Party Fees
Some of the closing cost fees will be associated with third party vendors that must perform required services. Home appraisals, title searches, and costs for obtaining credit reports are some of the items included in this area. While these may be a little harder to negotiate because the lender uses specific companies to perform these services, it does not hurt to ask if you can use your own appraiser or title search company.
Zero Closing Cost Mortgages
Buyers may also wish to inquire about a no closing cost mortgage. This type of mortgage eliminates all closing costs. The lender covers all of the closing cost fees in exchange or a slightly higher interest rate on the loan. In most cases the increase is less than one-quarter of a percent. This type of loan can be very helpful to buyers. Buyers can then use the money that they saved on closing costs to help with the move.