Believe it or not, most closing costs are negotiable. And depending on your loan program, you may be able to reduce your out-of-pocket closing costs substantially. At Newfi, we can review all your loan options to make sure you get the best rate at the lowest cost.
Frequently Asked Questions
What are closing costs?
Closing costs are one-time expenses that must be paid when you buy a house with a home loan or refinance a mortgage. Some costs are paid by the buyer; others by the seller. Typical closing costs include appraisal fees, escrow fees, upfront mortgage insurance, points (prepaid interest), and other fees. Note that all home loans have closing costs; the real question is who pays for them and how.
How much will my closing costs be?
Typical closing costs range from 2 to 5 percent of the home purchase price. These closing costs depend greatly on the type of loan you get, your state of residence, and other factors. To estimate what your closing costs will be, talk to an experienced Newfi Mortgage Advisor today for a no-cost, no-obligation quote.
How do I reduce closing costs?
- Ask the Seller to Pay – You never know until you ask! Depending on their situation, a seller may be willing to cover some or all of your closing costs.
- Choose the Right Home Loan – Some loan options, like an FHA loan, allow the seller to credit up to 6% of the purchase price of the home to cover closing costs and other prepaid costs.
- Reduce Points – Points, or prepaid interest, are usually the largest of all closing costs. One point typically costs 1% of the purchase price and can be used to reduce your interest rate. By choosing a no-points option or a 1-point option, you can drastically reduce your closing costs, though at the expense of a higher interest rate.
- Close at the End of the Month – By closing closer to the end of the month, you reduce the amount of interest owed on closing day. For example, if you close on the 15th of the month, you pay per diem interest from the 15th to the 30th, but if you close on the 29th, you’ll only owe 1 day of interest.
- Include Closing Costs in the Loan – If you choose an interest rate higher than you would normally qualify for, you can earn “lender credits” with which you can pay down closing costs. Note that there’s no free lunch: earning these credits means higher interest payments down the road.
Why trust Newfi Lending with your home loan?
Newfi is a direct lender, not a broker, so we can make lending decisions fast and at low interest rates. We’ve earned a five-star customer satisfaction rating from LendingTree for our low rates, fast processing, and excellent customer service. Give us a call at (888) 316-3934 and see just how friendly we are!